topic Re: portfolio recovery in Rebuilding Your Credit

portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:00:23 GMT

Had a charge off with Capital One in 2012. Capital One filed a 1099c with the IRS and I paid the tax on the charge off amount of 798$. Portfolio just appeared on all 3 CRA showing I owe the 798$. Calling me and sending letters...Can you guys give me advice?

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:04:37 GMT

If a debtor is later forced to pay a cancelled (1099-C) debt, he is entitled to a refund of any taxes paid as a result of the 1099-C.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:11:49 GMT

Is it legal for portfolio to be reporting and trying to collect a forgiven debt? Thanks for the help.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:38:25 GMT

The debt is not actually forgiven. They just wrote it off their books. It is fully legal for them to 1099-C you and sell the debt to a collection agency. If you were to pay the collection you could amend the return you had the 1099-C on.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:41:24 GMT

The law is simply not clear on the issue. Some courts have ruled one way, some have gone the other way. The banks generally argue that the 1099-C is just an administrative requirement, and does not itself, cancel the debt. The only thing that is clear, is what I stated above.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:43:12 GMT

So they can report a balance that was forgiven? Thats why Cap1 filed it.. because they forgave it..they sell forgiven debts...am I wrong? If I am I need to know..I have disputed it on all 3 CRA's this evening.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:45:26 GMT

Not saying cancel the debt...but shouldn't it be reported a zero balance by portfolio? Cap1 has it listed 0 balance.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:46:43 GMT

Plus portfolio retained the account one year after Cap1 reported to IRS and I paid the tax.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:54:24 GMT

Again, the 1099-C does not equal "debt forgiven". The IRS has bunch of different administrative triggers that require the bank to send a 1099-C.

And, no, portfolio is not required to report a $0 balance simply because of Cap One sending the 1099-C.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 02:56:54 GMT

Ok..that's why I asked..I have read so much of the opposite on here. But I believe you and thanks for the help.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 03:04:46 GMT

What they *should* do and what they are legally allowed to do are often different.

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 03:14:33 GMT

Ok..Norman..I'm sure the CRA's will side with Portfolio. It was worth a shot..

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 05:56:27 GMT

The way you would attack this, is to dispute the validity of the debt via direct dispute with PRA, claiming that Cap One had no debt to sell, as you considered the debt to be cancelled when you paid taxes on it. If you have a copy of the 1099-C then send it to them.

They may or may not buy this argument. Is it past SOL?

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 11:33:33 GMT

Re: portfolio recovery

Anonymous — Sun, 29 Nov 2015 21:21:50 GMT

What state are you in?

Re: portfolio recovery

Anonymous — Mon, 30 Nov 2015 00:17:22 GMT

Massachusetts.

Re: portfolio recovery

Anonymous — Mon, 30 Nov 2015 02:12:12 GMT

Spoke to a Lawyer today...my 1099c says on it "canceled debt". The Lawyer claims that there isn't a judge in Massachusetts that would make someone pay for a canceled debt and paid taxes on it. He said there is no debt to be paid. Portfolio will not be able to validate..The biggest reason is they buy debt from Capital One in bundles and have no clue that a 1099c (canceled debt) was even issued. He said a canceled debt is very different than a "charge off". Just telling everyone what he said. Portfolio is reporting the original amount.

Re: portfolio recovery

Anonymous — Mon, 30 Nov 2015 02:24:20 GMT

@Anonymous wrote:
Spoke to a Lawyer today...my 1099c says on it "canceled debt". The Lawyer claims that there isn't a judge in Massachusetts that would make someone pay for a canceled debt and paid taxes on it. He said there is no debt to be paid. Portfolio will not be able to validate..The biggest reason is they buy debt from Capital One in bundles and have no clue that a 1099c (canceled debt) was even issued. He said a canceled debt is very different than a "charge off". Just telling everyone what he said. Portfolio is reporting the original amount.

Am just wondering why these banks sell off ' cancelled debts' like OP's bundled in with charge offs that are collectible?

Re: portfolio recovery

Anonymous — Mon, 30 Nov 2015 04:06:09 GMT

Nice thought on PRA not being able to validate. They are actually quite good at it recently. They sente copies of statements.

Re: portfolio recovery

Anonymous — Mon, 30 Nov 2015 07:45:39 GMT

@Anonymous wrote:
Spoke to a Lawyer today...my 1099c says on it "canceled debt". The Lawyer claims that there isn't a judge in Massachusetts that would make someone pay for a canceled debt and paid taxes on it. He said there is no debt to be paid. Portfolio will not be able to validate..The biggest reason is they buy debt from Capital One in bundles and have no clue that a 1099c (canceled debt) was even issued. He said a canceled debt is very different than a "charge off". Just telling everyone what he said. Portfolio is reporting the original amount.

Sounds like you are good to go. Send PRA a direct dispute alledging there is no debt to base their collection on as it was cancelled, and include a copy of the 1099-C.