PFD and getting a 1099

[Anonymous]

Is there a certain minimum if you do a PFD?  If they agree to a PFD, does that mean they are agreeing to not 1099?

I am helping a relative with her SERIOUSLY bad credit.  She owes SO SO SO SO MUCH!!!!!  She doesn't have any more open accounts.  They were all closed/charged off.

I don't want her to get sued and want to try some PFD and/or payment plans ASAP w/these creditors, but WHAT ABOUT THE 1099s?!?!

[Anonymous]

If you pay in full when doing the PFD there would be no reason for the 1099.

A 1099 can be sent for any debt forgiven $600 or more. 

[Anonymous]

Well, I was going to try PFD and not always PIF.  She has A LOT of debt.  Wow.......she may get a lot of 1099s......

So they MUST do 1099s for over $600?  If you make an agreement with the creditor(s) & are not PIF, can they agree to NOT 1099?  I know they aren't apt to do so, but I am wondering if they are REQUIRED to 1099 for over $600?

[Anonymous]

I am not really sure about if they are required to send a 1099-C or not if a debt is forgiven. 

And I don't know that I would even bring that up to the creditor.  Go to the IRS website and read about the 1099-C or even call a consumer attorney and get a free consult.  Ask about it.

[Anonymous]

Thank you.

Once, a long, LONG time ago, I asked for a forgiveness and was sent a 1099.  I wasn't told about it and didn't even know what it was until I called.  I'll have to research this more.  I don't want to hide my head in the sand.  I'd rather ask and know and not have my relative get a surprise in the mail......she'll k*ll me.....

[Jazzzy]

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@Anonymous wrote:

Thank you.

Once, a long, LONG time ago, I asked for a forgiveness and was sent a 1099.  I wasn't told about it and didn't even know what it was until I called.  I'll have to research this more.  I don't want to hide my head in the sand.  I'd rather ask and know and not have my relative get a surprise in the mail......she'll k*ll me.....

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I agree with not bringing up the 1099 issue if trying for a PFD.

She is far better off to get a PFD and then still get a 1099. How high is her income? What tax bracket is she in? Far too many people worry about getting 1099s when, in reality, it presents a small obligation for most people.