QUESTION
What happens if I am being sued for a loan that I cannot pay?
Asked on Jul 19th, 2017 on Bankruptcy - Arizona
More details to this question:
My friend loaned me money for my college classes. The agreement was to pay them back once I received my loans/grants. I never received any loans or grants so now I am unable to pay them back. I am also unemployed so I don’t have the money to do so even if I wanted to.
1 ANSWER
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If you borrow money the lender has a right to be paid or they can choose to forgive the debt. If they sue they have a right to take any non-exempt property (attached is a list of exempt property for all Arizona residents). If they forgive the debt then they are to file a 1099 with the IRS showing you had income in the amount they forgave. I hope this helps.
Answered on Oct 02nd, 2017 at 2:47 PM