Legal Question in Credit and Debt Law in Massachusetts

I am currently disabled and I just got approved for a student loan discharged on the basis of disability in the amount of $40-50k. However soon I will get a settlement in a lawsuit for an accident. How will this affect my 1099-C? Could I still apply for an insolvency exception if the settlement exceeds the $50k? How much may I need to pay the IRS if I can't get an insolvency approved? Can someone come after my settlement money?


Asked on 6/28/15, 5:37 pm

2 Answers from Attorneys
ERNEST BIANDO LAW OFFICE OF ERNEST T. BIANDO, LLC

My first thought would be that you should have a trust written and fund the trust with the settlement money. However, I would need to know more about your situation to better determine what is the best way to go. Contact my office and we can discuss the matter further.

Read more
Answered on 6/29/15, 4:20 am
Jed Berliner L J Berliner

"Could I still apply for an insolvency exception if the settlement exceeds the $50k?"

No.

"How much may I need to pay the IRS if I can't get an insolvency approved?"

Depends on your tax bracket and the amount of attorney fees and costs.

"Can someone come after my settlement money?"

Yes - who are you afraid of?

If there is another creditor out there, you need a bankruptcy consultation.

Read more
Answered on 6/29/15, 8:55 am


Related Questions & Answers

More Credit, Debt and Collections Law questions and answers in Massachusetts