Bust The Debt Money Block

Bust The Debt Money Block

Move the Debt Mountain- Busting Money Blocks

Debt consumes your extra time and money.  If you are in debt and receive an increase in income the responsibility to pay off the debt combined with garnishments and seizures can result in a loss of current assets as well as future or additional income. God did not mean for debt to be such a large factor in our lives.  Unfortunately, we have made debt an idol.  We have created burdens from not waiting on God. Many have mortgages or car loans and called it a blessing.  I was one of those people who thought a mortgage was a blessing until God took me out of that situation.

If you have to have debt, technically, this is how God meant for debt to work, again, ONLY if you need debt:

Deuteronomy 15: 1-2

1″At the end of every seven years you shall grant a remission of debts. 2″This is the manner of remission: every creditor shall release what he has loaned to his neighbor; he shall not exact it of his neighbor and his because the LORD’S remission has been proclaimed…

Today, debt is not canceled every 7 years.  In fact, we are taken to court for any unpaid debts, assets are seized, and people have lost their lives for certain debts.

People are essential in slavery to pay off debts.  “The rich rule over the poor, and the borrower is slave to the lender.”  Proverbs 22:7 NIV.  But people today promise their future earnings and many never get caught up.  You lose the flexibility to leave a job with peace of mind when God calls you out.  Most people have to sell their time to keep up with payments.  When do you enjoy the increase and blessings God has given you?   Millionaires have gone bankrupt 3.5 times because debt and investing in too many ventures at once to earn more money.

What can we do:

Eliminate debt and increase your tithing/giving/offerings and savings.  Your credit score is not the most important thing in the world.  In fact, it is a game…the more debt you have the better your score will reflect.  But the catch is you have to continue this cycle and increase your debt each time.  Many borrow more than they have. Credit scores are also used as a status symbol.  Credit scores do not reflect who you are or how important you are.  Place your confidence in God instead of scores.  

People are denied credit for not having enough credit history. The credit history shows that you have learned to play the debt game. You are rewarded more credit when you pay off your current debt and borrow more.  Debt management has been named good stewardship.  However, we are not to have debt.  Good stewards are debt free.  Don’t play the game.  We have a Heavenly Father that will provide.  This is also your opportunity to learn to wait.  

Take the following steps to control debt:

Taxes and Debt

Canceled debt over $600.00 is considered taxable income by the IRS.  If your goal is to accept debt reduction this is income.  The tax amount could range from 20-35% depending on your tax bracket.  The lender will send a 1099-C for canceled debt to be reported with taxes.  The borrower and the IRS will receive copies of the 1099-C, therefore, you can not avoid paying taxes on this amount.

Foreclosed homes could also incur a tax balance. Unfortunately, the amount forgiven could be taxable however this is an exception to this rule that will allow the borrower to ask for an exemption up to a certain dollar amount for the home.  By completing the exception for you can avoid taxes on the foreclosed home.  

Read more here: https://www.irs.gov/uac/what-if-my-debt-is-forgiven

https://www.irs.gov/uac/the-what-ifs-for-struggling-taxpayers

 – Y. Michelle Coard
copyrights owned by Y. Michelle Coard of Business & Personal Accounting Solutions, Corp.

Y. Michelle Coard, B.A.S, A.A.S, Accountant and Profit Strategist.

 

 


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