Hi, I recently did a lot of research on this as have a similiar situation. Apparently the IRS considers two triggering events to issue a 1099C either you settle for less than the amount due, or bank / collector gives up on collecting the account due to their internal processes and procedures. So if never settled the collector would have to give up on collecting the debt and or forgive and therefore reporting a balance would not be appropriate (at least in my and others opinion although some disagree) Probably your best course of action is to dispute with the OC and or CRA based on the fact that you received a 1099 which can only be triggered by the lender canceling or forgiving the debt and yet they are still reporting a balance.
Of course if falling off anyway in a couple of months may not need to.
In researching this I also found that it is a complex situation. Some consider the IRS 1099 completely seperate from the CRA reporting, which I disagree with, but no clear cut answer one way or the other., many different opinions on that.
For more details you can review on IRS website publication 4681 which goes into extensive detail on 1099s for canceled debts.
Hope this helps.
Starting Scores: 9/19/2012 EQ 613 / TU 526 / EX 543
Current Scores: EQ 716 TU 724 EX 724 Goal Scores: 700
