--- title: "Meaning & Key Takeaway of: Most people don't know this, but if you…" description: "\"Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt..." image: "https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg" --- # Most people don't know this, but if you settle a debt for… ![“Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less…” quote by Jean Chatzky](https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg) [Download](https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg) [Open image](https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg) > “Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less than 50%. Anything more than $600 is generally considered taxable, but the IRS will sometimes waive the tax if you can prove that your assets were less than your liabilities when the debt was settled.” [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Settling a debt for less than owed may create taxable income, as the forgiven amount is considered a financial benefit. **In simple terms:** Forgiven debt can be taxed. Key Takeaway Check tax implications before settling debt. Themes personal finance tax law debt management Mood cautious informative Type advisory educational When to use this quote - tax filing - debt settlement negotiations - financial counseling Key Concepts taxable income IRS regulations financial liability Questions to Reflect On - Do you know how much forgiven debt is taxable? - Can you document your asset‑liability position effectively? A Different Perspective IRS may waive tax if assets are lower than liabilities at settlement. ★ ★ ★ ★ ★ No ratings yet [People](https://sms4smile.com/quotes/about/people/) [Taxes](https://sms4smile.com/quotes/about/taxes/) ## Related quotes > [“The quicker you settle the debt,the quicker you can move forward with your life. Actions are bigger than words and get rid of that…](https://sms4smile.com/quotes/financial-revolution/the-quicker-you-settle-the-debt-the-quicker-you-can-move-forward-with/) Financial Revolution > [I had talks with my American colleague, (Treasury Secretary) John Snow, which created the basis on which the forgiveness of Iraqi debt can be…](https://sms4smile.com/quotes/hans-eichel/i-had-talks-with-my-american-colleague-treasury-secretary-john-snow/) Hans Eichel > [“A grudge was just another debt owed.”](https://sms4smile.com/quotes/alex-london/a-grudge-was-just-another-debt-owed/) [Alex London](https://sms4smile.com/quotes/author/alex-london/) > [I personally do not owe the debt that was owed by the campaign.](https://sms4smile.com/quotes/alan-keyes/i-personally-do-not-owe-the-debt-that-was-owed-by-the-campaign/) [Alan Keyes](https://sms4smile.com/quotes/author/alan-keyes/) > [We borrowed money to fight the Revolutionary War, and so there was a debt owed. We paid it. If we have done that for…](https://sms4smile.com/quotes/danny-k-davis/we-borrowed-money-to-fight-the-revolutionary-war-and-so-there-was-a/) [Danny K. Davis](https://sms4smile.com/quotes/author/danny-k-davis/) > [Societies in which most people depend for most of their goods and services on the personal whim, kindness, or skill of another are called…](https://sms4smile.com/quotes/ivan-illich/societies-in-which-most-people-depend-for-most-of-their-goods-and/) [Ivan Illich](https://sms4smile.com/quotes/author/ivan-illich/) > [We have learned to turn out lots of goods and services, but we haven't learned as well how to have everybody share in the…](https://sms4smile.com/quotes/warren-buffett/we-have-learned-to-turn-out-lots-of-goods-and-services-but-we-haven-t/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [Americans have learned to trust free markets. Republican or Democrat, we believe the unimpeded exchange of goods and services will yield better solutions than…](https://sms4smile.com/quotes/john-katzman/americans-have-learned-to-trust-free-markets-republican-or-democrat/) [John Katzman](https://sms4smile.com/quotes/author/john-katzman/) > [Purchasing power parities are not a reasonable method for comparing households across countries or currencies. The reason for this is simply that PPPs are…](https://sms4smile.com/quotes/thomas-pogge/purchasing-power-parities-are-not-a-reasonable-method-for-comparing/) [Thomas Pogge](https://sms4smile.com/quotes/author/thomas-pogge/) > [The role of business is to provide products and services that make people's live better - while using fewer resources - and to act…](https://sms4smile.com/quotes/charles-koch/the-role-of-business-is-to-provide-products-and-services-that-make/) [Charles Koch](https://sms4smile.com/quotes/author/charles-koch/) > [Somebody's buying these treasury bills at 1/20th of one percent. I mean we consuming about $2 billion a day of goods and services beyond…](https://sms4smile.com/quotes/howard-warren-buffett/somebody-s-buying-these-treasury-bills-at-1-20th-of-one-percent-i/) [Howard Warren Buffett](https://sms4smile.com/quotes/author/howard-warren-buffett/) > [Money is not a part of the visible sector of the economy; people do not consume money. Money is not a physical factor of…](https://sms4smile.com/quotes/louis-o-kelso/money-is-not-a-part-of-the-visible-sector-of-the-economy-people-do/) [Louis O. Kelso](https://sms4smile.com/quotes/author/louis-o-kelso/) > [Wal-Mart has become the whipping boy for political demagogues, unions and anti-traders. I suggest that they have the wrong target… Wal-Mart exists and prospers…](https://sms4smile.com/quotes/walter-e-williams/wal-mart-has-become-the-whipping-boy-for-political-demagogues-unions/) [Walter E. Williams](https://sms4smile.com/quotes/author/walter-e-williams/) > [You want my dark side? Have I ever stolen anything? Not so much intentionally. But I don't think it's so much stealing as... being…](https://sms4smile.com/quotes/bill-murray/you-want-my-dark-side-have-i-ever-stolen-anything-not-so-much/) [Bill Murray](https://sms4smile.com/quotes/author/bill-murray/) > [This is not really currency that circulates. It's like the old joke about expensive vintage wine. Wine prices will go up and once in…](https://sms4smile.com/quotes/michael-hudson/this-is-not-really-currency-that-circulates-it-s-like-the-old-joke/) [Michael Hudson](https://sms4smile.com/quotes/author/michael-hudson/) ## More by Jean Chatzky > [It's not about having it all. It's about having what you value most.](https://sms4smile.com/quotes/jean-chatzky/it-s-not-about-having-it-all-it-s-about-having-what-you-value-most/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [Get your friends involved. Let your shopping buddies know that you're on a tight budget, and they can help you out when your willpower…](https://sms4smile.com/quotes/jean-chatzky/get-your-friends-involved-let-your-shopping-buddies-know-that-you-re/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [You must be sure - and I mean absolutely positive - that you have the willpower to pay off those credit cards and not…](https://sms4smile.com/quotes/jean-chatzky/you-must-be-sure-and-i-mean-absolutely-positive-that-you-have-the/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [A little personality goes a long way.](https://sms4smile.com/quotes/jean-chatzky/a-little-personality-goes-a-long-way/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [The Bankruptcy Reform Act of 2005 made it harder for individuals to file bankruptcy, which is always the last resort. Unfortunately, simultaneously consumers racked…](https://sms4smile.com/quotes/jean-chatzky/the-bankruptcy-reform-act-of-2005-made-it-harder-for-individuals-to/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [Save for your goals. Take note of what's coming your way - vacations, the holidays, what ever is going to cost you money -…](https://sms4smile.com/quotes/jean-chatzky/save-for-your-goals-take-note-of-what-s-coming-your-way-vacations-the/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [Turn down offers for new cards or credit line increases on your current cards. Credit's tight, and chances are, you're not getting many offers…](https://sms4smile.com/quotes/jean-chatzky/turn-down-offers-for-new-cards-or-credit-line-increases-on-your/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [When you default on a secured debt, the creditor takes the asset that backs up that debt. When you convert credit card debt to…](https://sms4smile.com/quotes/jean-chatzky/when-you-default-on-a-secured-debt-the-creditor-takes-the-asset-that/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan…](https://sms4smile.com/quotes/jean-chatzky/a-consolidation-makes-sense-only-if-you-can-lower-your-overall/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [Sometimes a creditor is willingto do this as a bargaining point - you give the creditor cash in hand, it gives you a positive…](https://sms4smile.com/quotes/jean-chatzky/sometimes-a-creditor-is-willingto-do-this-as-a-bargaining-point-you/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [Debt settlement companies work as a middleman between you and your creditor. If all goes well (and that's a big if), you should be…](https://sms4smile.com/quotes/jean-chatzky/debt-settlement-companies-work-as-a-middleman-between-you-and-your/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [You also need to understand that when you consolidate credit card debt into mortgage debt - like a home equity loan or a HELOC…](https://sms4smile.com/quotes/jean-chatzky/you-also-need-to-understand-that-when-you-consolidate-credit-card/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [If you'd asked me a few years ago about debt settlement companies, I probably would have told you to avoid them.](https://sms4smile.com/quotes/jean-chatzky/if-you-d-asked-me-a-few-years-ago-about-debt-settlement-companies-i/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [If you are, consolidating at a lower interest rate can help you pay off your debt faster. But if there's even a small chance…](https://sms4smile.com/quotes/jean-chatzky/if-you-are-consolidating-at-a-lower-interest-rate-can-help-you-pay/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) > [You won't be caught off guard and you won't feel guilty, because you'll be spending money that you've allocated for the occasion.](https://sms4smile.com/quotes/jean-chatzky/you-won-t-be-caught-off-guard-and-you-won-t-feel-guilty-because-you/) [Jean Chatzky](https://sms4smile.com/quotes/author/jean-chatzky/) [Explore all 43 Jean Chatzky quotes ](https://sms4smile.com/quotes/author/jean-chatzky/) ## More Amount quotes > [Dating someone on the opposite end of the happy spectrum teaches you an incredible amount of patience.](https://sms4smile.com/quotes/chris-pine/dating-someone-on-the-opposite-end-of-the-happy-spectrum-teaches-you/) [Chris Pine](https://sms4smile.com/quotes/author/chris-pine/) > [When the amount of change externally exceeds the amount of change internally, the end is in sight.](https://sms4smile.com/quotes/jack-welch/when-the-amount-of-change-externally-exceeds-the-amount-of-change/) [Jack Welch](https://sms4smile.com/quotes/author/jack-welch/) > [A human being can only absorb a small amount of the mystical kundalini, you can be exposed again and again to it, but it…](https://sms4smile.com/quotes/frederick-lenz/a-human-being-can-only-absorb-a-small-amount-of-the-mystical/) [Frederick Lenz](https://sms4smile.com/quotes/author/frederick-lenz/) > [It's a great story for us whenever an entrepreneur makes a crazy amount of money and we get to tell the world about it.…](https://sms4smile.com/quotes/sarah-lacy/it-s-a-great-story-for-us-whenever-an-entrepreneur-makes-a-crazy/) [Sarah Lacy](https://sms4smile.com/quotes/author/sarah-lacy/) > [It's a challenge to work a character's arc into a format in which you only have a very limited amount of time to grow…](https://sms4smile.com/quotes/ginnifer-goodwin/it-s-a-challenge-to-work-a-character-s-arc-into-a-format-in-which-you/) [Ginnifer Goodwin](https://sms4smile.com/quotes/author/ginnifer-goodwin/) > [The amount of things you can do with a kettlebell is unsurpassed by any other training equipment - dumbbells, resistance machines, free weights.](https://sms4smile.com/quotes/laird-hamilton/the-amount-of-things-you-can-do-with-a-kettlebell-is-unsurpassed-by/) [Laird Hamilton](https://sms4smile.com/quotes/author/laird-hamilton/) > [The amount you give isn't important. What matters is what that amount represents in terms of your life.](https://sms4smile.com/quotes/jim-rohn/the-amount-you-give-isn-t-important-what-matters-is-what-that-amount/) [Jim Rohn](https://sms4smile.com/quotes/author/jim-rohn/) > [There's a place in Botswana where there are 100,000 elephants living in a single population. Think of the amount of space they need. Remember,…](https://sms4smile.com/quotes/patrick-bergin/there-s-a-place-in-botswana-where-there-are-100-000-elephants-living/) [Patrick Bergin](https://sms4smile.com/quotes/author/patrick-bergin/) > [How could you justify giving Holland twice the amount of money that you gave Belgium? Well, finally, I put it up to them. They…](https://sms4smile.com/quotes/w-averell-harriman/how-could-you-justify-giving-holland-twice-the-amount-of-money-that/) [W. Averell Harriman](https://sms4smile.com/quotes/author/w-averell-harriman/) > [I am not a great believer in dialectical struggle. I am much more of a fusion person. I see it as a dialogue, or…](https://sms4smile.com/quotes/marina-warner/i-am-not-a-great-believer-in-dialectical-struggle-i-am-much-more-of-a/) [Marina Warner](https://sms4smile.com/quotes/author/marina-warner/) > [The risk of developing carcinoma of the lung increases steadily as the amount smoked increases. If the risk among non-smokers is taken as unity…](https://sms4smile.com/quotes/richard-doll/the-risk-of-developing-carcinoma-of-the-lung-increases-steadily-as/) Richard Doll > [Both fact and logic seem to me to support the view that savings invested in privately owned economic tools of production amount to an…](https://sms4smile.com/quotes/f-a-harper/both-fact-and-logic-seem-to-me-to-support-the-view-that-savings/) F. A. Harper > [You have a little bit of talent, a certain amount of good fortune and a lot of hard work in pursuit of whatever truth…](https://sms4smile.com/quotes/donald-sutherland/you-have-a-little-bit-of-talent-a-certain-amount-of-good-fortune-and/) [Donald Sutherland](https://sms4smile.com/quotes/author/donald-sutherland/) > [I have a tremendous amount of respect for military families. To have to worry about your loved ones and still try and live a…](https://sms4smile.com/quotes/ashanti/i-have-a-tremendous-amount-of-respect-for-military-families-to-have/) [Ashanti](https://sms4smile.com/quotes/author/ashanti/) > [In sports teams, apart from talk of sporting prowess and the imparting of inspirational thought, an extraordinary amount of time is spent discussing, and…](https://sms4smile.com/quotes/harsha-bhogle/in-sports-teams-apart-from-talk-of-sporting-prowess-and-the-imparting/) [Harsha Bhogle](https://sms4smile.com/quotes/author/harsha-bhogle/) Browse all 4,202 Amount quotes ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less than 50%. Anything more than $600 is generally considered taxable, but the IRS will sometimes waive the tax if you can prove that your assets were less than your liabilities when the debt was settled.", "creator": { "@type": "Person", "name": "Jean Chatzky" }, "isPartOf": { "@id": "https://sms4smile.com/quotes/#website" }, "url": "https://sms4smile.com/quotes/jean-chatzky/most-people-don-t-know-this-but-if-you-settle-a-debt-for-less-than/", "about": { "@type": "Thing", "name": "Amount" }, "@id": "https://sms4smile.com/quotes/jean-chatzky/most-people-don-t-know-this-but-if-you-settle-a-debt-for-less-than/#quotation", "image": { "@type": "ImageObject", "@id": "https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg", "contentUrl": "https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg", "url": "https://sms4smile.com/quotes/i/108/jean-chatzky-15313_amount_most-people-don-t-know-this-but-if-you-s_1550709.jpg", "width": 1080, "height": 1080, "caption": "“Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially…” — Jean Chatzky", "creditText": "SMS4Smile Quotes", "creator": { "@id": "https://sms4smile.com/quotes/#organization" } } }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://sms4smile.com/" }, { "@type": "ListItem", "position": 2, "name": "Quotes", "item": "https://sms4smile.com/quotes/" }, { "@type": "ListItem", "position": 3, "name": "Jean Chatzky", "item": "https://sms4smile.com/quotes/author/jean-chatzky/" }, { "@type": "ListItem", "position": 4, "name": "Most people don't know this, but...", "item": "https://sms4smile.com/quotes/jean-chatzky/most-people-don-t-know-this-but-if-you-settle-a-debt-for-less-than/" } ], "@id": "https://sms4smile.com/quotes/jean-chatzky/most-people-don-t-know-this-but-if-you-settle-a-debt-for-less-than/#breadcrumb" }, { "@type": "WebSite", "@id": "https://sms4smile.com/quotes/#website", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "publisher": { "@id": "https://sms4smile.com/quotes/#organization" } }, { "@type": "Organization", "@id": "https://sms4smile.com/quotes/#organization", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "logo": { "@type": "ImageObject", "url": "https://sms4smile.com/quotes/wp-content/themes/sq/assets/icons/icon-512.png", "width": 512, "height": 512 } } ] } ```