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@DI wrote:
I was thinking creditors had to issue a 1099-C during the same year the debt was charged-off. If they do not...they're SOL. I could be wrong.
I'm not sure, but I don't think that would work.
If an OC charges-off the account -- which they must do after X number of days -- issuing a 1099 would mean they cannot sell the debt or assign it for collections to another entity. Issuing the 1099 means, efectively, that the debt no longer exists.
In general creditors usually only issue a 1099 when the debt is settled. Doing so now like OP claims is not, IMO, very common and I wonder what the benefit is to the CA / OC for doing so.
O6,
Just what I was thinking. If the debt is written off, then it's gone, FIle the taxes and make sure that there aren't any hits from CAs on the CRs and if so there is no way they can validate the debt.
I will definitely verify this but I'm also going to try to contact the IRS and find out if this was actually filed with them. I'm going to drive to my parents and get the paper tonight...I just can't wait any longer.
If it is filed, I'm obviously not doing my own taxes this year and going to a professional instead so I don't screw this up. Between not thinking this is valid at all and having a solid case for insolvency I shouldn't have to pay any of this but I'm nervous about filing one wrong paper and getting in trouble over it.
Even if this is valid, from what I'm reading a CA cannot send 1099Cs but JDB can. The CA never actually owns the debt so the 1099c would have to come from the OC. What I still don't understand is if a JDB pays pennies on the dollar for this account, how they can try to get a deduction for the original amount!
I have a feeling I'm going to be seeing a lot more of this since everything is falling off my CR in the next 1 1/2 years and my CS is decent enough that JDB are going to assume my situation has improved. It's funny because while I've worked incredibly hard to raise my credit score, I'm still in the same financial situation (minus some of the debt) as I was 7 years ago!
@Anonymous wrote:I will definitely verify this but I'm also going to try to contact the IRS and find out if this was actually filed with them. I'm going to drive to my parents and get the paper tonight...I just can't wait any longer.
If it is filed, I'm obviously not doing my own taxes this year and going to a professional instead so I don't screw this up. Between not thinking this is valid at all and having a solid case for insolvency I shouldn't have to pay any of this but I'm nervous about filing one wrong paper and getting in trouble over it.
Even if this is valid, from what I'm reading a CA cannot send 1099Cs but JDB can. The CA never actually owns the debt so the 1099c would have to come from the OC. What I still don't understand is if a JDB pays pennies on the dollar for this account, how they can try to get a deduction for the original amount!
I have a feeling I'm going to be seeing a lot more of this since everything is falling off my CR in the next 1 1/2 years and my CS is decent enough that JDB are going to assume my situation has improved. It's funny because while I've worked incredibly hard to raise my credit score, I'm still in the same financial situation (minus some of the debt) as I was 7 years ago!
A CA can issue a 1099. Some CAs actually own the debt instead of just servicing the debt.
So I picked up the document from my parents house and i'm not sure what to think. I'm sending out a DV to them immediately and will contact the IRS tomorrow (oh joy!).
All that was in the envelope was a 1099C obviously ripped out of an IRS book (complete with tear marks on the top), typed on a typewriter (those still exist?!), spelling errors all over it (their own address is spelled wrong, my parents address is completely spelled wrong, and my SS# has one number wrong in it) from a company that I finally was able to track down by googling their address.
They're collection lawyers, Valentine and Zimmerman, http://www.collection-lawfirm.com. The amount listed is possibly from my old BoA account, though when I subtract the interest from the amount of debt cancelled, it's still too high. The other problem is that it is listed on this form as being cancelled as of 12-1-09 but as of last week, it is still on my CRs under BoA.
And I get more confused.....
According to their website under their profile it says "We can represent your business in any county in Kansas and belong to several organizations which allow our office the ability to forward your claim anywhere in the United States."
Now when I read that, it sounds like they can only represent Kansas companies, so how would they take this account?
My head hurts
@Anonymous wrote:So I picked up the document from my parents house and i'm not sure what to think. I'm sending out a DV to them immediately and will contact the IRS tomorrow (oh joy!).
All that was in the envelope was a 1099C obviously ripped out of an IRS book (complete with tear marks on the top), typed on a typewriter (those still exist?!), spelling errors all over it (their own address is spelled wrong, my parents address is completely spelled wrong, and my SS# has one number wrong in it) from a company that I finally was able to track down by googling their address.
They're collection lawyers, Valentine and Zimmerman, http://www.collection-lawfirm.com. The amount listed is possibly from my old BoA account, though when I subtract the interest from the amount of debt cancelled, it's still too high. The other problem is that it is listed on this form as being cancelled as of 12-1-09 but as of last week, it is still on my CRs under BoA.
And I get more confused.....
According to their website under their profile it says "We can represent your business in any county in Kansas and belong to several organizations which allow our office the ability to forward your claim anywhere in the United States."
Now when I read that, it sounds like they can only represent Kansas companies, so how would they take this account?
My head hurts
Message Edited by KristenM on 01-21-2010 04:08 PMMessage Edited by KristenM on 01-21-2010 04:08 PM
It is strange, but I don't know why a creditor would expose themselves to liability falsifying an IRS form. I wonder if there is some financial advantage of a creditor basically giving up on a debt like this.
I'd call the IRS and seek guidance.