Lclutse Posted April 16 Share Posted April 16 So I won a 6 figure settlement against a builder…because of them I had to file Chapter 13 bk 4 years ago…although I had very little debt…at this time I have 16 months left in the bk with a balance of roughly $5800 (currently I pay $162.50 bi weekly) being paid to the IRS. I have a few questions 1. how much will I be taxed by the IRS afterwards 2. I want to buy another home (HTX) should I wait? I want to go FHA…my scores according to myfico my mortgage scores are TU 532 Experian 590 Equifax 631 Can I buy? For context, I went to Lennar who pulled my credit but no response… I have four small payments (mostly medical debt) on my CR…which will get paid before my discharge… 3. My payoff on my car as of today is $15,510.18 on a 2019 Hyundai Tucson I was thinking of either paying it off or trading it in for a new vehicle with a large down payment. Which should I do? @MarvBear Quote Link to comment Share on other sites More sharing options...
Admin MarvBear Posted April 16 Admin Share Posted April 16 When they pay you the settlement amount, will they withhold a certain % to cover your income taxes? What is the APR on your current auto loan, and who is the lienholder? Quote Link to comment Share on other sites More sharing options...
Lclutse Posted April 16 Author Share Posted April 16 1 hour ago, MarvBear said: When they pay you the settlement amount, will they withhold a certain % to cover your income taxes? What is the APR on your current auto loan, and who is the lienholder? I was told by atty that this is an insurance claim so there would be no taxes held however others have said they will hold 35% because I will be considered in a new tax bracket so idk… my current lien holder on my suv is Prestige Financial I think my APR is 9.6% they dropped my payment from 486 to 376 a year ago for on time payments… Quote Link to comment Share on other sites More sharing options...
Lclutse Posted April 16 Author Share Posted April 16 (edited) @MarvBear I also own a 2013 Nissan Altima free and clear (paid off by bk) free and clear… im not sure if I should trade it in for the new vehicle… Keep it and get it fixed and trade in my Hyundai for the new car… trade both in and upgrade both get a new Hyundai and buy a used (2018/19) Nissan ….(I live where two cars are a necessity…plus I’m single) lol Ideally, I want to get rid of any car note ASAP or by 2026 when the bk will fall off my CR so that my DTI is low Edited April 16 by Lclutse Quote Link to comment Share on other sites More sharing options...
Admin MarvBear Posted April 17 Admin Share Posted April 17 In my state the IRS would not tax a lawsuit settlement if it were paying for a personal injury settlement due to something like an auto accident. Otherwise, I believe you will have to treat the money as income when you file your taxes. But I am not an attorney, nor am I a tax expert. How does one person live in circumstances where two vehicles are a necessity, you can only drive one at a time. Quote Link to comment Share on other sites More sharing options...
Lclutse Posted April 23 Author Share Posted April 23 On 4/17/2023 at 12:20 PM, MarvBear said: In my state the IRS would not tax a lawsuit settlement if it were paying for a personal injury settlement due to something like an auto accident. Otherwise, I believe you will have to treat the money as income when you file your taxes. But I am not an attorney, nor am I a tax expert. How does one person live in circumstances where two vehicles are a necessity, you can only drive one at a time. I was thinking the same thing about the taxes too but my attorney swears I don’t. He says it’s an insurance claim🤷🏽♀️…. If this happens I might as well sign the entire check over 😢 because at 35% tax I will have nothing… as for the car, I live in Texas lol we don’t have massive transit system that takes you around the city (on time) lol so dependable vehicles are a necessity. One I want to use for leisure use the other for work and errands… we tend to have high mileages here because of how far yet close everything is lol Quote Link to comment Share on other sites More sharing options...
Admin MarvBear Posted April 23 Admin Share Posted April 23 Well, I really don't know if the State one lives in makes a difference, since the IRS is federal. Florida has no state income tax. Anyway, after I received my settlement check, at the end of the year I also got a 1099 for it. The IRS pursued it with me, and I ended up having to pay income tax on my settlement. The 1099 form is used to report non-employment income to the Internal Revenue Service (IRS). Businesses are required to issue a 1099 form to a taxpayer (other than a corporation) who has received at least $600 or more in non-employment income during the tax year. The above paragraph, I just lifted from a google search. Quote Link to comment Share on other sites More sharing options...
Lclutse Posted April 30 Author Share Posted April 30 On 4/23/2023 at 4:42 PM, MarvBear said: Well, I really don't know if the State one lives in makes a difference, since the IRS is federal. Florida has no state income tax. Anyway, after I received my settlement check, at the end of the year I also got a 1099 for it. The IRS pursued it with me, and I ended up having to pay income tax on my settlement. The 1099 form is used to report non-employment income to the Internal Revenue Service (IRS). Businesses are required to issue a 1099 form to a taxpayer (other than a corporation) who has received at least $600 or more in non-employment income during the tax year. The above paragraph, I just lifted from a google search. I am going to lean to your knowledge and agree…why I’m being told that there’s is no tax I’m sure has to do with the unscrupulous builders knowledge of what happens in these types of cases.. with that said what is your opinion on the earlier questions I asked. Quote Link to comment Share on other sites More sharing options...
Admin MarvBear Posted April 30 Admin Share Posted April 30 Do you need another vehicle, or do you just want another vehicle? I still do not understand why one person needs two vehicles, since you can only drive one at a time. Quote Link to comment Share on other sites More sharing options...
Lclutse Posted May 5 Author Share Posted May 5 On 4/30/2023 at 4:05 PM, MarvBear said: Do you need another vehicle, or do you just want another vehicle? I still do not understand why one person needs two vehicles, since you can only drive one at a time. Again, where I live two vehicles is a necessity. If one of my vehicles goes down I’m SOL. Mass transit here sucks and Uber/Lyft is VERY expensive. Just going a mile can be $50…seriously. So yes I do need another lol MarvBear 1 Quote Link to comment Share on other sites More sharing options...
hdporter Posted June 5 Share Posted June 5 On 4/30/2023 at 5:05 PM, MarvBear said: I still do not understand why one person needs two vehicles, since you can only drive one at a time. Isn't "want" good enough, as long as there's no downside to two vehicles? In our case, we now have 3 vehicles for the 2 of us: a 2020 Lincoln MKZ, a 2011 BMW 328i, and a 2006 Lincoln Zephyr (w/ 130k mi). The Lincoln drives and rides beautifully (taken care of impeccably). When the out of pocket cost of holding onto the 2006 is , why not offload our errand mileage onto it and get longer life out of our two faves. Yeah, we risk being mistaken for someone from the 'hood who's been saving up nickles to score a Lincoln. But the car's becoming a classic! Quote Link to comment Share on other sites More sharing options...
Admin MarvBear Posted June 5 Admin Share Posted June 5 13 hours ago, hdporter said: Isn't "want" good enough, as long as there's no downside to two vehicles? Not when both vehicles are financed. I cannot begin to tell you how many times analysts have asked me that question regarding the applicant. I usually am prepared with an answer to help the approving analyst give me the approval we all want. Quote Link to comment Share on other sites More sharing options...
hdporter Posted June 5 Share Posted June 5 1 hour ago, MarvBear said: Not when both vehicles are financed. I cannot begin to tell you how many times analysts have asked me that question regarding the applicant. I usually am prepared with an answer to help the approving analyst give me the approval we all want. NOW we get to the nub! The issue here isn't ownership of two vehicles; it's having two vehicles under financing ... which leads to the bigger problem of "I can't drive around in a 6-year old vehicle, what will people think!!" (In extreme cases, that's a "2-year" old vehicle; which quickly segues to the perpetual lessees. I sometimes wonder why home builders haven't caught on to the fact that if they made stylistic changes every 5 years (say, for example, adornments equivalent to "fins"), they might just fire up the construction trade with people who MUST live in the latest design! Quote Link to comment Share on other sites More sharing options...
hegemony Posted June 6 Share Posted June 6 23 hours ago, hdporter said: NOW we get to the nub! The issue here isn't ownership of two vehicles; it's having two vehicles under financing ... which leads to the bigger problem of "I can't drive around in a 6-year old vehicle, what will people think!!" (In extreme cases, that's a "2-year" old vehicle; which quickly segues to the perpetual lessees. I sometimes wonder why home builders haven't caught on to the fact that if they made stylistic changes every 5 years (say, for example, adornments equivalent to "fins"), they might just fire up the construction trade with people who MUST live in the latest design! FWIW, we just hit 8 for 2 people (none financed) and it makes our insurance agent happy. He said that he knows we can only drive 2 at a time so we're paying him for 8 when only any two are on the road. 8ball 1 Quote Link to comment Share on other sites More sharing options...
Lclutse Posted June 7 Author Share Posted June 7 @MarvBear soon after this post my daughter got hit by an 18 wheeler…luckily I had the 2nd car… Quote Link to comment Share on other sites More sharing options...
8ball Posted June 7 Share Posted June 7 20 hours ago, hegemony said: FWIW, we just hit 8 for 2 people (none financed) and it makes our insurance agent happy. He said that he knows we can only drive 2 at a time so we're paying him for 8 when only any two are on the road. We are 2 for 2 with cars but 7 for 2 with TV sets. 🤪 MarvBear and hegemony 2 Quote Link to comment Share on other sites More sharing options...
Lclutse Posted June 16 Author Share Posted June 16 Lol Quote Link to comment Share on other sites More sharing options...
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