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Monthly updating of CR post 1099c


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Hi all -- :)++

Hopefully someone has the answer to this ---

My question centers around the issuance of a 1099c and subsequent monthly updating of a CR ...

Once an OC has issued a 1099c would they be in violation of the FCRA, for instance, by updating that TL with a monthly charge off?

Since the 1099c issuance the balance has been going up monthly as they update the TL.

Isn't this is a misrepresentation of the character/status of a debt as well?

TIA for any and all help ....

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The 1099c issue is a confusing one. The problem is that even if the company issues a 1099c, they are allowed to collect the debt (the judge even said that in the ruling that forced these companies to issue 1099c's). Therefore, they can certainly update the trade line in accordance to the contract after they do a charge off and issue a 1099c.

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Thanks for the replies WhoCares1000 and willingtocope ...

I am waiting until the SOL has passed before I poke them with a stick :)

The monthly update kills the score a bit ...

Im just not understanding the rationale of the 1099c I guess .. They issue one on the debt but can still collect on it? It just doesnt seem right to be able to 1099 a debt and then continue to update it as if it was never settled.

Not saying you aren't correct just trying to wrap my head around this ...

Would a 623 letter be in order? If they dont admit to the issuance of a 1099 would they be in violation then?

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The IRS has some guidelines on when a creditor MUST issue a 1099c. Its been a few years since i read them, and I wouldn't be surprised if they've changed, but...one of the guidelines said that the OC has to issue the 1099c within a certain period of time after an "identifiable event"...things like CO, no longer contacting the debtor, etc. Its possible one of those things has occured.

Also, to a certain extent, this is a good thing for you.

1.) You must pay taxes on the "found income" for the year in which you received it. Used to be, the OCs would wait 3 years after your default, and you not only got to pay taxes buy penalty and interest for late filing.

b.) You really only owe taxes on the actual money borrowed...not on any interest or penalty the OC may have charged you. There are (were?) two boxes on the 1099c...one says balance, the other says penalty and interest included in the balance. You only owe taxes on the difference.

So, I'd suggest you just let this alone. Pay your taxes for this year. And then let the SOL run out. If they take you to court before then, say to the judge "...but your honor, I got the 1099c and paid the taxes, doesn't that mean the IRS took the debt?...". Let the judge figure it out. I don't beleive there have been any definitive circuit court rulings on this, so one judge may differ from another.

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I've already paid the taxes (2 yrs ago when the 1099 was issued).

However they have been updating the TL monthly ever since ... ugh

The SOL for collection of this (going by state law and not the cc agreement) was up in Oct - giving all of November just to be sure :) So come Dec there are no worries for suit as I would have an affirmative defense to the action should one be brought.

But the reporting SOL continues for another year or so and with the monthly updating making it appear new (at least this is how I see it) it kills the score some ...

I was just looking for some way to get this either off the CR or at least to stop it updating monthly ....

And you are right about no clear caselaw on this -- I havent been able to find any ...

Thanks again for the reply and info .... much appreciated

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