Forgive Debt

Show Table of Contents

Sometimes you can convince a creditor to agree to fully or partially "forgive" a debt, meaning that the amount is no longer owed (see Resolving Debts for a short discussion on debt forgiveness).

To record that a creditor has forgiven some or all of a debt,

  1. Select the "Debts" tab, and click the "Forgiven" cell for the desired debt.
  2. Enter the amount forgiven; EstateExec will automatically show you any remaining amount owed.
  3. Press the "OK" button (as always, remember that your changes are not saved until you press the estate "Save All" button).

It's worth noting that Debt forgiveness does not cause an entry to appear in the Cashflow tab, because no money changes hands. However, forgiven amounts are generally considered taxable.

If a debt has become time-barred (i.e., unenforceable due to the statute of limitations), it is considered "cancelled" by the IRS. The net effect on the estate is similar to having the debt forgiven, so you may want to enter such cancelled amounts as forgiven, with an explanation in the Notes field.

See also Pay Off Debt to pay off any remaining amount owed.

Copyright © 2014-24 EstateExec