Here's Who We Are

We're Fund Virtually Everything

We fund business owners nationwide, regardless of industry, credit, or time in business. We fund it all.

Apply Now

We Provide Multiple Options

We have a lot of different financing options available to our clients. Regardless of your situation, we’ll have a solution for you.

Fast Approval

Our application process is completely online. You can get funds in your bank account in literally 24 hours.

The Working Capital You Need In 24 Hours.

We get you funding. It's that simple. Regardless of credit, income, or time in business - we'll fund you.


Use our online form or call toll-free anytime to get started. There's no cost, and the application takes only three minutes.


Receive application approval in as little as 24 hours. There is no credit check required.

Receive Funds

Review and return your signed agreement and get your money in as little as 24 hours.

Recent Business Loans Funded

100K Term Loan

Ambulance Service

Our client bought a new ambulance.
2019 - June
55K Advance

Truck Funded

Our client used the funds to hire new team members.
2019 - February
85K Term Loan

Restaurant Funded

Our client used the funds for restaurant equipment.
2019 - May

Get a Decision in as Little As 30 Seconds

We’re Fast. We Help Regardless of Credit. WE HAVE A SOLUTION FOR YOU.

Apply Online

We have a completely online application process, which is simple and easy.

Get Offers

We'll match you with the best loan offers we have that are financially responsible.

Get Funded Quickly

We'll fund you the same day you accept our offer.

How Delancey Street Works

Fill Out Our Application

Answer basic questions about yourself and fill out our entirely online application. Each loan has its own online process.

Meet Your Concierge

We'll pair you with an experienced Delancey Street specialist who will reach out to you, and understand your needs. We'll try to determine which financial product is right for you.

Compare Our Loan Offers

We give you a few different loan offers based on your scenario and what options you qualify for.

Choose Your Loan

Once you've chosen a loan that works for you, we finalize it and start getting the documents needed.

Get Funded

Once we get all of the documents back, we'll get you funded ASAP.

We Help You Grow

After you get funded, your Delancey Street concierge specialist will keep in touch to make sure you're happy and doing well.

Business Loans

Get business loans ranging from 3 months to 18 months
No credit score requirement, we have a program for everyone
We can fund up to $5 million in virtually 24 hours

Taxes on Cancelled Debt


Taxes on Cancelled Debt: What You Need to Know

Having debt forgiven or cancelled can feel like a blessing – but it can also create a tricky tax situation. If you’ve had debts cancelled or discharged recently, you may be wondering how it affects your taxes. As a financial services company, we want to provide some guidance on the tax implications of cancelled debt.When a lender forgives or cancels a debt you owe, the IRS typically considers that cancelled debt as taxable income. So if you had $10,000 in credit card debt forgiven, the IRS sees it as you receiving $10,000 in income.There are some exceptions to this rule, which we’ll explain. But in most cases, any cancelled debt over $600 will be reported to the IRS and you’ll owe income tax on it.We know taxes on cancelled debts can be confusing. This article will break down when cancelled debt is taxable, exceptions to the tax rules, and how to handle it on your tax return. Our goal is to make this clearer so you can make informed choices if you’ve had debts discharged.

When Cancelled Debt Becomes Taxable Income

In the eyes of the IRS, when a lender forgives a debt you owe – whether it’s a credit card, personal loan, mortgage, or other debt – they are essentially giving you money.And just like any other income you receive, forgiven debts may be taxable. Here are some examples of when cancelled debt typically becomes taxable income:

  • Credit card company writes off your unpaid balance
  • Mortgage lender agrees to a short sale for less than you owed
  • Personal loan is forgiven through a debt settlement program
  • Debt collector agrees to settle a past-due bill for less than the full amount

The lender is not required to forgive the debt. But when they do, the amount forgiven becomes taxable income to you in most cases.The lender will report the forgiven debt to the IRS on a 1099-C form. And you’ll need to report it as income on your tax return, just like your wages from a job or other earnings.

Exceptions: When Cancelled Debt Is Not Taxed

There are some exceptions where you may be able to exclude cancelled debt from your taxable income:Bankruptcy: Debt discharged through bankruptcy is not taxable in most cases. This includes Chapter 7 liquidation and Chapter 13 restructuring.Insolvency: If your total liabilities exceeded your total assets (meaning you were insolvent) at the time of the debt cancellation, that amount may not be taxable.Student Loans: Federal student loans forgiven through income-driven repayment plans are not taxable through 2025. Private student loans forgiven due to death or permanent disability are also exempt.Mortgage Debt (with limits): Up to $750,000 in forgiven mortgage debt from your primary residence can be excluded from taxes, through 2025. This applies to loan principal, not interest.Gifts: If a relative or friend forgives a personal loan as a gift, this is not taxable income. But they may need to file a gift tax return if over the annual exclusion amount.Deductible Debt: Forgiven debt is not taxable if the interest was tax deductible, like on a business loan or mortgage. This does not apply to the principal, only deductible interest.So in cases like these, you may be able to avoid owing income tax on cancelled debt. Make sure to work with a tax professional to determine if you qualify for one of these exceptions.

How Cancelled Debt Appears on Your Taxes

If you receive a 1099-C form reporting cancelled debt of $600 or more, you typically must include this amount as income on your tax return. Here’s how it works:

  • The creditor or lender files Form 1099-C with the IRS showing the amount of debt forgiven
  • You receive a copy of Form 1099-C for the tax year when the debt was cancelled
  • On your Form 1040, you report the forgiven debt amount as income on the appropriate line
  • If you qualify for an exception, use Form 982 to list the exclusion and excluded amount

Even if you can exclude the cancelled debt from your income, you may still receive a 1099-C. Be sure to properly account for any allowable exceptions on your return.Including the 1099-C amount on your tax return ensures you avoid penalties for underreporting income. Failing to report cancelled debt can lead to IRS audits, interest charges, and additional fines.

The Impact on Your Finances

Having debt forgiven can improve your financial situation by eliminating burdensome monthly payments. But the tax bill on cancelled debt may reduce these benefits.

  • Additional income from cancelled debt could bump you into a higher tax bracket
  • Owing extra tax may negate the cash flow relief from discontinued loan payments
  • If you cannot pay the tax bill immediately, you may need to set up a payment plan with the IRS

The additional tax liability can come as a surprise if you’re not prepared. We recommend talking to a tax professional to understand the impact beforehand, so you can plan accordingly.

Strategies for Handling Taxes on Cancelled Debt

If you will owe income tax on discharged debt, here are some tips to make it more manageable:

  • Set aside a portion of your discontinued loan payments to save for the tax bill.
  • Explore IRS payment plans if you cannot pay in full. Interest and penalties apply but it spreads payments out.
  • File for an extension if you need more time to gather funds or determine exclusions.
  • Amend a prior year’s return if you qualify for a retroactive exclusion, to recoup some tax paid.
  • Consider credit counseling to improve cash flow going forward, so you can handle the extra tax burden.
  • Discuss options with the creditor, like restructuring payments to help cover taxes owed.

The Takeaway on Taxes and Cancelled Debt

Having debt forgiven can be a huge relief but also creates tax headaches in many cases. If you are considering debt settlement or cancellation, be sure to plan for the tax impact.The exceptions we covered can potentially reduce or eliminate taxes owed on discharged debt. Work with a tax professional to determine if you qualify. And allow time to set aside funds once you know the amount of taxable income.While paying taxes on cancelled debt can reduce the financial benefits, it is often still favorable compared to staying trapped paying off the full balances. Just make sure you understand the tax implications first, so you go into it with eyes wide open.We hope this overview helps provide clarity on the tax rules for cancelled debt. Reach out with any other questions! Our team is happy to help you understand this complex topic.

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

"Super fast, and super courteous, Delancey Street is amazing"
$125,000 Small Business Loan
"Thanks for funding me in literally 24 hours"
$35,000 Lawsuit Advance
"Great choice for first time fix and flippers"
$250,000 Hard money Loan

In The Media

Delancey Street CEO discusses ways to reward employees
Delancey Street CEO discusses the benefits of franchising on Forbes.
Delancey Street CEO discusses management on AMEX.
Get Out of Debt
Credit Card Debt Relief
Marital Debt Relief

Managing Marital Debt: Strategies for Financial Freedom Marriage can be…

Private Student Loan Debt Relief

Managing Private Student Loan Debt: Options for Relief Private student…

Veteran Debt Relief

Helping Veterans Find Financial Freedom Being a veteran comes with…

Delancey Street understands funding like no one else!
Steven Norris
Get Funding Today

Ready To Get Started?

If you have questions, feel free to shoot us an email, or fill out our live chat.

Apply Now