There is still a net saving. So it’s hard to understand why this is seen as a problem in first place! Second, the vast majority of people canceling their debts are not required to pay taxes on the forgiveness of the balance by Credit card debt relief help. This is due to the insolvency of the “rule, described in IRS Publication 908,” Bankruptcy Tax Guide. “Do not let the title fool you. You must have submitted a formal declaration of bankruptcy to take advantage of the rule of insolvency. Basically, “insolvent” means that you have negative equity – that is, “should” over the “proper”.