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I might wave the white flag!


kylemac
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Help,

For 13 months I have kicked butt on improving my credit. I am now at a deadend regarding a 2000 charge off from Providian ($500=$1500).

I have done it all -- dispute, DV, MOV, etc... To no avail.

I am now applying for a car loan, but the loan officer has flagged the application, noting the unresolved charge off. I have supplied her with some answered to DVs from old collection agencies and hopes it will do SOMETHING...

I have settled other accounts during the past year and had a PFD, but Providian has sold this account, which has been sold and sold again to other collection agencies.

Today, I'm considering settling... I will not pay the full amount, but I can't afford to screw around any more.

Am I crazy? Is there something I can do here?

Kylemac

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:twisted:

(sigh) Try as I might, no one will accept this white flag.

I just got off the phone with Four Score (a CA), who say even they can't settle this account.

Get this, three months ago Providian said they sold the account. I telephoned the CA, who sold it...

HOW CAN I SETTLE THIS ACCOUNT... just settled for less than the full balance, R9... anything!!!

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Don't know if this would work, but here's a thought...

If Providian has sold the account, then it should be listed as "charge off / sold to another lender" on your reports. Call them and demand a 1099c for that amount they have "written off". Yes, if its over $600 you'll pay taxes on it, but once you have the 1099c there is case law that says a JDB cannot collect on the balance. Therefore any CA and/or JDB that reports on your CRs is violating the FCRA ("reporting incorrect info").

Worth a try?

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Well, I gave it a whirl...

Just got off teh phone with Providian... requested the 1099-C.

The lady thought I was crazy at first, but then found the info on the computer. She sent a request and said it should arrive in 7-10 business days.

Like the rest, I'd like to know this caselaw data. THen I can approach Providian and demand some action.

Thanks in advance.

Kylemac

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The whole charge off / write off / JDB thing is really hard to get a handle on. Here's a link to the IRS's take on 1099c...

http://www.unclefed.com/IRS-Forms/2005/i1099ac.pdf

NOTE: It implies that you should get a 1099c when a debt is SOL and you use that as a defense!

Banks that are subject to FDIC rules are required to write off after 6 months...and issue a 1099c. CCs are not always associated with banks, even though they might appear to be.

I'll go look for the court case I saw...

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And of course I can't find the case law now...

I remember reading a case where the court found that since the "forgiven" debt was, according to the IRS, income...a JDB could not legally collect it. In effect, the US Government is saying that the debtor has dealth with the debt.

I look again when I get a chance...

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I'd like to see some step-by-step instruction here.

A quick search says the 1099c bit is not true... and only good after SOL...

This account is withint SOL -- 4/2001

This is what I have done so far...

1) asked for the 1099c

2) Will get it in 7-10 days

NEXT....

Kylemac

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We keep walking over each other here...

If the OC sold the account, then sooner or later you'll have a JDB after you.

But...if the TL for the OC says CO, and you get the 1099c, then the debt is also uncollectable by them. So...you hit them with an ITS for reporting incorrect info under the FCRA...they should be reporting "written off" balance $0.

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So let me get this right....

You all are saying if you have a TL that is CO, with a zero balance you ask for a 1099 and then if any JDB comes after you, you nail them with that? I'm curious to know, since I have a few of these on my CRs.....

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Cole: Honestly, I'm not certain. IMHO this is worth a try. IF the OC does give you a 1099c, then they have to file a similiar document with the IRS. That means that they close the file and write it off their books. They can put the "written off" notation on your credit reports, but that damage does dissipate over time.

Yes, you'll have to claim the 1099c as income and pay taxes on it...but, you can usually work out payments with the IRS.

And, if the OC sells the account to a JDB, you should be able to chase them away with the court case I mentioned.

Honestly, this is all speculation on my part at this time...but it does seem to make sense.

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  • 2 weeks later...

I believe WILLIN is correct in that an account for which a 1099c has been issued will ultimately be declared uncollectable. The IRS wording implies or states that if a debt qualifies as forgiven or uncollectable a 1099c must be issued.

The true definition of MUST is questionable as WILLIN noted.

I am not sure however that the issuance of a 1099c renders a debt uncollectable in itself. I may be splitting hairs, but the verbage goes one way but doesn't implicitly go the other way. The resulting question that remains is if a debt for which a 1099c has been issued, but hasn't had a qualifying "event" is still collectable, or rendered uncollectable by the 1099c alone.

I also am suspicious that the act of selling the debt may also render it uncollectable in that it is similar to a lein sale of property. The verbage refers specifically to property, but does leave out lending of money. Perhaps I am reaching too far, but in my mind the greed googles of the IRS might cause them to lean towards getting the 1099c generated now as opposed to years down the road.

Its kind of like paying protection money. IRS strongarms the creditors into submitting 1099cs and collects 15-30% of the balance due in solvent cases. Money well spent in my mind.

Gettinout

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  • 4 weeks later...

I'm getting the run around... bad!

I have NOT RECEIVED the 1099c... and it's been nearly 45 days.

I was told on Jan. 5, 2006 that I would receive my 1099c in the mail. Today I called back and have put on hold several times. I was eventually transferred to a collection agency.

That agency said they could not give me the 1099c since they no longer own the account (they sold it and I DVd them... the CA is off my report).

Providian still shows up as a charge-off... and this is getting frustrating.

Any ideas what to do?

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Sounds like providian may have figured out that sending a 1099c was not in their best interest.

You say the CA you contacted sold it? If that's the case, then Prov sold it to them...which means the Prov TL should say "sold to another lender" with a balance of $0. If that's not what they're reporting, then maybe you need to call them back to see if they still own it...

If they don't, then they need to fix your report...if they do, then negotiate a settlement with them.

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Thanks for the info.

I called again and demanded to talk to a supervisor...

They no longer own the account, so they can't "settle" the account -- which has been gone from Vision Mgt to Pinnacle to H&R... I DVd the account and everything is off my report except for Providian.

The guy from Providian said my account was noted that a 1099c wasn't sent because I don't own a SAVINGS account... told him I had a CC acount and that I wanted a 1099"C".

Again, I'm just frustrated... but not giving in...

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The 1099-c issue is a major bone of contention right now between the "Debt Buyers Association" and the IRS--the DBA is suing over it. The IRS wants them issued for the difference between the amount of the debt and the settlement amount if the difference exceeds $600. The DBA wants to avoid sending them because they claim they will violate the FDCPA by doing so. But only because the JDBs get so little documentation from the OCs that to issue a 1099-c almost inevitably involves misrepresenting something about the debt. It is the industry's own illegitimacy that is the problem here.

In any case, OCs who have sold debts that are still within statute have no business issuing any forms 1099-c.

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willingtocope,

Personally I would never under any circumstances desire a 1099C issued under my identity unless it's a huge debt and collectible and further, would benefit from taxable income instead instead of the owing balance. The problem with what you are suggesting is that if the debt has been sold or legally transferred to another party, that party can contractually collect! For an OC to cancel a debt they sold rendering it legally unrecoverable would be a fraudulent act on their part. It may be a good strategy if the OC has not sold the obligation and the 1099C prevents legal recovery.

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ghacorp: I certainly agree. The theory is, however, that once they do issue you a 1099c, then you can settle with the IRS, and protect against the debt being resold. If the OC does issue the 1099c and then sells the balance also, then its their problem, not mine.

The IRS seems to be encouraging this...see...

http://www.irs.gov/pub/irs-pdf/i1099ac.pdf

...like flacorps says, the whole subject is up in the air right now, and I'm just suggesting we help muddy the waters as much as we can.

(I'll also very, very pissed off that I just received two 1099c totally about $25 large from Chase dated 2005 for two CC's that were IIB in March of 2004. I know I don't have to pay anything, but its just one more hassle that I don't want to deal with).

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