07-30-2012 11:05 AM
I had a credit card though Commerce Bank that I did not handle well and the debt was cancelled by the OC in 2007. I received a 1099-C shortly thereafter which I reconciled with my taxes that year. However, the OC has it reported on my CR as charged off with the original amount owed and the late payment amount. It states the last date of activity as Oct 2006. I have attempted to dispute the info that is reported however they never change it. Is there a way to have it updated? Should the balance read $0? Goodwill letter maybe?
I am in the process of refinancing my mortgage and this is not helping.
07-30-2012 12:51 PM - edited 07-30-2012 12:54 PM
How, specifically, was "the debt cancelled by the OC in 2007"?
Did you enter into a settlement agreement with them, thus satisfying the debt, but leaving an amount that the IRS considers as income to you, and thus the reason for the 1099c? A charge-off itself does not cancel a debt.
The key, in my opinion, is documentation that the debt was satisfied, which would require updating of balance to $0.
If you have provided evidence of payment to them, and yet they still verify a remaining balance, trot over to small claims court and file a civil action.
The FCRA dispute processes do not compel documentation. The court does.
07-30-2012 12:52 PM - edited 07-30-2012 01:14 PM
If you did not make payment on the debt, it unfortuantely is reporting correctly.
The 1099-c doesn't reconcile the debt with the lender. The lender cancelled the debt, and wrote off the entire amount at 100% loss. They sent you the form, as required by law, for you to file with your taxes.
That's beacause the IRS sees this as "untaxed income" for you. What you did with the 1099 form when you filed your taxes was pay taxes on the amount of money you didn't pay back to the lender. You are good in the eyes of the IRS, but you did not settle the debt with the lender in any way.
I doubt you'd get a goodwill deletion of this kind of account -- they wrote off/charged off the debt and lost money. You can always try though.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.