Comments on: Old Debt Settlements Can Come Back to Haunt with Large Tax Bite

By: Leenie

Leenie — Fri, 27 Jan 2012 19:26:29 +0000

Yup, Stevie is correct:

http://www.insidearm.com/daily/debt-buying-topics/debt-buying/regulations-limit-scope-of-36-month-rule-relating-to-1099-c-reporting-aca/

By: Stevie

Stevie — Mon, 02 May 2011 22:37:58 +0000

I’m sorry I just don’t understand all this buzz about 1099-C. I nor anyone I have known has ever received a 1099-C for CC debt. Never. And I have defaulted on my share of CCs which i tried my best to prevent, believe me!

On 10 Nov. 08 the US Treasury decided that JDBs are non longer required to issue 1099-c based on the triggering event known as a 36- month No Payment Testing Period which would have accounted for the bulk of future 1099-C’s from 2004 onward. That overturned 2004 rule, requiring JDBs to issue a 1099-C after a 36 month period of non activity, itself accounts for the bulk of the unnecesary buzz about the impending acceleration of 1099-C’s

Furthermore, the OC is precluded from cancelling or discharging (forgiving) a debt, thereby requiring a filing of a 1099-C, if they sell it to a Debt Purchaser (JDB). Most of them sell off charged off debts.

So there are fewer and fewer reasons that an OC and a JDB would issue a 1099C. I personally feel settling the account is the real trigger.

If you look at most posts about 1099-Cs on sites like this you will discover there are more people concerned with receiving a 1099C than there are those that actually receive them.

Stop the hype!

By: mike farber

mike farber — Thu, 10 Sep 2009 01:09:32 +0000

I don’t care when they issue a ‘tax bite’ on the ‘cancellation’ of an alleged credit card debt. If the debt is contested and the compay or junkee fails to follow federal law and properly Validate the debt, they should be held accountable for penalties; we should not acquiesce and pay a tax on a contested debt.

By: debt relief

debt relief — Mon, 01 Dec 2008 16:10:01 +0000

Thank you so much for your post! You really hit the nail on the head with this one. With the economy the way it is right now with all the layoffs and more to come; government spending and deficit out of control; the continued housing slump; one wonders where to turn for help. It sure is nice to know that there are debt management companies out there that can help folks avoid bankruptcy and still keep their heads above water. Thanks so much for the taking the time to post this information.