Charged off Account showing balance after 1099c

[TJC1989]

hi!

so i was sent a 1099-c back in november 2019 on a Synchrony Bank/Sams club card for $764.  This account is still showing a balance and reporting every month as a C/O.   I called Synchrony and they say there is nothing that they can do to make it relfect $0.  I just disputed with all the CBs with a copy of my 1099.  Has anybody else ran into this problem?  All of my other charge offs have reflected a $0 balance.  This outstanding balance is tanking my score that i am trying to rebuild. 

[RobertEG]

Do they acknowledge to you that they have, in fact, cancelled the debt?

Some creditors interpret the IRS regs to require sending of a 1099c in some situations where they have not, in fact, actually cancelled any remaining debt obligation........

[vntrsc]

Here are rulings from the 4th and 5th Circuit Courts of Appeals.

 The majority of courts that have addressed this issue, including the Court of Appeals for the Fourth Circuit, have found that an IRS Form 1099-C alone is not sufficient evidence that the debt has been cancelled. See, e.g., F.D.I.C. v. Cashion,720 F.3d 169, 180 (4th Cir. 2013) ("[T]he mere fact that a Form 1099-C is filed does not constitute sufficient evidence, standing alone, that a debt has been cancelled."); Owens v. Commissioner, 67 Fed. App'x 253 (5th Cir. 2003) (stating that the issuance and filing of a Form 1099-C does not constitute actual cancelation of the loan).

[TJC1989]

Honestly, I don't know. I will call tomorrow and ask? 
im still learning all of this terminology. I dont really understand because I have a few charge offs from around the same time that are a zero balance.... it seems kind of weird that it shows a balance, it's tanking my utilization, and I can't even pay it to $0. 

[TJC1989]

Hmmm. Thanks for that info. 
so does this mean, I have to just let it age off, and let my utilization be drug down until it hits 7 years?

[RobertEG]

If you in fact  have not paid the debt or it was not actually cancelled, then it still comprises delinquent debt, and thus is properly included in your percent utilization.  

If you contact them and they acknowledge that they have formally cancelled the debt, then you would have basis for a dispute asserting necessity of update of the balance to $0.

However if, upon contact, they state that they have not in fact cancelled and remaining debt obligation, you can pay it, which then mandates update of the balance to $0.

Either way, you can pursue removal if the debt from your % util calculation, but cannot do so without taking one of those steps.