cancel
Showing results for 
Search instead for 
Did you mean: 

What does it mean to file a 1099 on your income taxes?

tag
Creditweary
New Visitor

What does it mean to file a 1099 on your income taxes?

I have a question, I received a letter in the mail because a creditor sold my account to another creditor.  The letter is offering a settlement amount half of what I owe.  I called them today to see how it would report on the lady told me that it would state:
 
Settled in full - but the remainder balance would still show up.  She also said to get the remainder balance off my credit report I would need to file a 1099
 
1.  What does it mean to file a 1099 with my income taxes?
 
2.  If it states "settled in full" but the remainder balance is still listed, how will that affect my FICO score?  Will it go up?
 
Any advice is appreciated.  Thanks!
Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: What does it mean to file a 1099 on your income taxes?

THEY would file a 1099 Misc Income on you and have the remainder charged to you as 'income'.
Message 2 of 5
PayYouNever
Frequent Contributor

Re: What does it mean to file a 1099 on your income taxes?

Wow, if you're settling, but then getting forced to declare the balance as income to IRS you're getting played. Did you try to PFD on that account? Otherwise, you'll need to find some itemized deductions to offset this additional income.
Message 3 of 5
SmartCookie
Valued Contributor

Re: What does it mean to file a 1099 on your income taxes?

hi creditwearly and welcome,
 
 
Payyounever brings up what you need to do.  Send them a PFD letter for what they offered you to settle for.  No delete, no money. Only correspond with them in writing.  As well, don't rush to get things cleaned up until you know exactly what you are doing and why.   
EQ 787 EX 781 TU 737 11/17/07 *** I am not an attorney. If I was, I might not clip coupons. If you want legal advice, consult an attorney. If you want my personal opinion, feel free to consider my posts***
Message 4 of 5
Anonymous
Not applicable

Re: What does it mean to file a 1099 on your income taxes?

Want the BIG whammy?
 
You sell you home via a 'short-sale' (the bank wagrees to tke less than it's owed) and in January you get a 1099 Misc Income for $50K... now you are in major deep  doo-doo with the IRS (taxes on that $50K are payable by Apr 15 - no extension on the payment, sorry).  Just when you thought you were in recovery - now you're in even deeper.
 
The bank writes the 'loss' off as income to you... "technically" it is.


Message Edited by Lady_Scarlet on 10-01-2007 08:35 PM
Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.