The amount you save on each settlement can be taxable, if you cannot prove you are insolvent. Many of our clients are able to prove insolvency since their debts are more than their assets. By proving insolvency the forgiven debt is not considered income.
Any debt that is forgiven over $600 or more will be issued a 1099 by the creditor. We do not handle taxes therefore it is important to talk to your tax accountant upon receiving a 1099 to see how it will affect your taxes.