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Charge Off - Unexpected 1099-C Form

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Charge Off - Unexpected 1099-C Form

I had a major life emergency in late 2017/early 2018 and my entire financial life fell apart. I've been rebuilding ever since then.


I have a charge-off on my credit report from an Amazon store card in May 2018 for an 8K balance. Since then, I've been making monthly payments to pay the balance down. I haven't missed a payment, and the balance is now $4k. I was making the payments directly to Synchrony for a couple of years, they then transferred it to a collections agency for a couple of years, then it was transferred back to Synchrony last year and I was making payments directly to them again.


With no warning, I received a 1099-C form stating that they forgave the debt in October 2022. I received the 1099-C form in February 2023. However, the monthly payments are automatic and they definitely deducted my normal monthly payment for the months of October, November, and December. Also, my current past due balance is still listed as $4200 as of January 2023.


The charge off was reported first in May 2018 and hasn't had a status update since then. Syncrony updated the credit tradeline to "charge-off" for September 2022, October 2022, December 2022, and January 2023, even though they were receiving regular monthly payments during this time. This fresh charge off tradeline tanked my score almost 60 points. 


I'm not sure what to do. Why would they issue the 1099-C if they were taking monthly payments for me? If the debt is forgiven shouldn't my past-due balance be $0? Why has the charge off status been freshly reported when it hasn't updated since 2018?

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Community Leader
Super Contributor

Re: Charge Off - Unexpected 1099-C Form

If they issued a 1099-C, tben yes they forgave the debt and therefore they should update their reporting to $0 balance, yes. Why they randomly decided to do that, I have no idea. You could try calling and asking.


As far as the updated reporting, unfortunately they are free to update and correct the TL if they so choose (I say correct because they are within their right to update monthly with the CO status, even if you were paying on it), which they unfortunately did do and it cost you points due to the "catch-up penalty".

Last App: 1/10/2023
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Currently rebuilding as of 04/11/2019.

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