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My 1099-C Story!


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I just got a 1099-C today that I intend on reporting as fraudulent. Here is the story.

I was initially contacted in June 2010 by a JDB about an alleged debt. The alleged debt is not on my credit report at all! I ignored them as I didn't feel it necessary to get them to validate. I saw they hard pulled on my report. They never sued probably because they saw I successfully fought off 2 other JDB's and won in court by electing private arbitration.

The last contact I had from them was in Nov 2010. Today I get a 1099-c. It has not even been three years from the last collection activity by them!

So should I contact a consumer lawyer first or go ahead and file a complaint to my states AG and file a tax fraud complaint with the IRS?

What about a letter to the JDB warning them of these actions and demanding them to rescind the 1099 first?

any suggestions?

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I just got a 1099-C today that I intend on reporting as fraudulent. Here is the story.

I was initially contacted in June 2010 by a JDB about an alleged debt. The alleged debt is not on my credit report at all! I ignored them as I didn't feel it necessary to get them to validate. I saw they hard pulled on my report. They never sued probably because they saw I successfully fought off 2 other JDB's and won in court by electing private arbitration.

The last contact I had from them was in Nov 2010. Today I get a 1099-c. It has not even been three years from the last collection activity by them!

So should I contact a consumer lawyer first or go ahead and file a complaint to my states AG and file a tax fraud complaint with the IRS?

What about a letter to the JDB warning them of these actions and demanding them to rescind the 1099 first?

any suggestions?

It cost a firm money to pay a person to report debt problems to the credit bureaus. Just because it doesn't show on your credit report, doesn't mean it didn't happen. If you owed this debt in the past, past non-payments have a way of catching up on you.

That being said - JDB alleges you owe this debt, the next action is to prove it. What you need to do (doing this yourself), is send them a debt validation letter, stating failure to respond validates your not responsible for this obligation. By sure to send this registered mail.

If this debt is over $5000, you could seek out an attorney. If under $5000, your best bet is to take this to small claims court and get a judgment.

:)

.

Edited by 2ndTimeAround
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I was wondering if anyone could give some constructive input and opinions on this letter I am thinking about sending to the JDB concerning this matter.

Mr. Scumbag Lawyer,

I had received a fraudulent 1099-C “Cancelation of Debt” form from your client Scumbag JDB, on (Date Here).

I have never received any previous correspondence from your office concerning an alleged debt that was allegedly and initially incurred with Scumbag Credit Card Co. As you should be aware, your office is required under law to send an initial communication concerning an alleged debt and afford me the opportunity to demand validation of an alleged debt that you are attempting to collect on behalf of your client.

I categorically deny and have no knowledge of the alleged debt for which your client fraudulently issued a 1099-C for. There also is no such record of the alleged debt with the corresponding account number listed on any of my credit reports. I did notice however, what I consider to be an impermissible “hard inquiry” made by your office, on my credit report.

I demand, in no uncertain terms, for your client to rescind the fraudulent 1099-C.

I allow 30 days from the receipt of this letter in which to do so. The alternative being, I will submit to the I.R.S. form 3934-A, reporting your client for tax fraud, submit a complaint to the office of the (My State's) Attorney General, submit a complaint to the F.T.C. and submit a complaint to the U.S.P.S. for mail fraud. I also reserve the right to bring an action against your client for FDCPA and other Federal and State violations.

Your compliance will be appreciated. Thank You.

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Validation of Debt Request

Attention: Mr. Lawyer,

From: You

Subject: 1099-C dated x/x/x

Regarding the subject calculation of debt form from the company JBL. Be advised, this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (B) that your claim is disputed and validation is requested.

I respectfully request that your office provide me with competent evidence that I have any legal obligation to pay you.

Please provide me with the following:

What the money you say I owe is for;

Identify the original creditor;

Explain and show me how you calculated what you say I owe;

Provide me with copies of any papers that show I agreed to pay what you say I owe;

Provide me with your license numbers and Registered Agent.

If your offices have reported invalidated information to any of the three major Credit Bureau’s (Equifax, Experian or TransUnion), said action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you for the following:

Violation of the Fair Credit Reporting Act

Violation of the Fair Debt Collection Practices Act

Defamation of Character

If your offices are able to provide the proper documentation as requested, I will require at least 30 days to investigate this information and during such time all collection activity must cease and desist.

Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel. This includes any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.

If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.

I would also like to request, in writing, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls or correspondence sent to any third parties, it will be considered harassment and I will have no choice but to file suit. All future communications with me MUST be done in writing and sent to the address noted in this letter.

This is an attempt to correct your records, any information obtained shall be used for that purpose.

Your Signature

Your Name

.

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Here we go again; Portfolio Recovery Associates is flooding mailboxes with bogus 1099-C’s claiming they suffered losses on bottom feeder debts they purchased for pennies.

The IRS has a publication that is required reading for anyone being scammed by PRA.

It is IRS Publication 4681 (available online) and Chapter 3 states the following:

Introduction

This publication explains the federal tax treatment

Of canceled debts, foreclosures, repossessions,

and abandonments.

Generally, if you owe a debt to someone else

In addition, they cancel or forgive that debt, you are

treated for income tax purposes as having income

and may have to pay tax on this income.

This publication refers to debt that is canceled or

forgiven as “canceled debt.” However, under

certain circumstances, you may not have to include

canceled debt in income. If you do exclude

canceled debt from income, you may also be

required to reduce your “tax attributes.” Reduction

of tax attributes is discussed in detail later in

this publication.

Nonbusiness credit card debt cancellation.

If you had a nonbusiness credit card debt canceled,

you may be able to exclude the canceled

debt from income if the cancellation occurred in

a title 11 bankruptcy case, if you were insolvent

immediately before the cancellation, or if you

were affected by the Midwestern disasters. You

should read Bankruptcy, Insolvency, or Qualified

Midwestern Disaster Area Indebtedness

An applicable financial entity includes:

• A federal government agency,

• A financial institution,

• A credit union, or

Any organization a significant trade or

business of which is lending money. (PRA DOES NOT MEET ANY OF THESE DEFINITIONS)Interest included in canceled debt. If any

interest is forgiven and included in the amount of

canceled debt in box 2, the interest portion that

is included in box 2 will be shown in box 3.

Whether the interest portion of the canceled

debt must be included in your income depends

on whether the interest would be deductible if

you paid it. See Deductible Debt under Exceptions,

later.Many emails stated this was their first contact by Portfolio Recovery Associates, they never before were contacted, or, they asked for validation of the alleged debt, yet received none.

Two years ago, we went to a Washington Post reporter who contacted the IRS regarding this matter.

PRA must be able to produce some type of valid documents that make their claims credible, however based on their record of accomplishment; they likely have little or nothing to back up their claim.

They are still playing this same game of lies, phony documents, and inaccurate credit bureau reporting.

We contacted many attorneys and officials about this, we can expect that the Consumer Financial Protection Bureau (CFPB) will finally address the abuse and force PRA to comply with the law.

Until then, here is one method of dealing with this consumer swindle.

When you receive a 10990C from

Portfolio Recovery Associates, LLC,

140 Corporate Blvd.,

Norfolk, VA 23502 ...consider the following:

● Send them a certified letter or a fax with a return receipt that gives your name, account number and other identifying information. In it, state that you have never received any goods or services from PRA and the 1099-C issued does not contain any valid explanation of what role they played by losing money or forgiving a debt,

● Demand they send you documents that prove their claim or copies of accounts, signatures, goods provided, services rendered and all other information that connects your social security to their alleged loss.

● If possible, hold off on filing your taxes until they have had a reasonable time (30 days?) to respond to your notice.

● Be sure to keep every item associated with this, including mail, envelopes, etc. If you live in a state where it is legal and call PRA, tape their conversations to create an additional record.

Check here if you are not sure: Can We Tape? | Reporters Committee for Freedom of the Press

● If PRA ignores your request and you are under pressure to file your taxes, you would be wise to decide whether you plan to include that 1099-C in your filing. If you plan to file and choose not to include it based on your contention that it is bogus, attach a copy of the letter sent to PRA, and include a Photostat copy of both sides of the green certified mail card and/or the receipt confirmation from your fax.

● Include a letter to the IRS explaining why you feel you do not owe this money and give them a breakdown of the actions you have taken.

● You can also file an online complaint with U.S. Postal Inspectors for what they could determined to be mail fraud at: https://postalinspec...dComplaint.aspx That the USPS Inspectors can make that decision, however if enough consumers file complaints they are obligated to investigate those claims.

● IMPORTANT: Once a 1099-C is issued, the law mandates that the debt can no longer be collected. This includes PRA selling it off to another vulture. They MUST show a zero balance on your credit report and are prohibited from extending the seven-year reporting statute. PRA cannot call you or send collection notices after a 1099-C has been issued.

● Tape recording their conversation becomes even more important should they contact you after they issued the 1099-C. or should they send a collection. Of course, they will claim it was a mistake… it was not. PRA collects on parasite debts, meaning they are so old, they are decayed and fossilized. If you receive a call under these circumstances, state they sent out a 1099-, ask why they are calling. Expect the lies to come out like puke from a drunk.

● Consumers need to understand that heir hard earned money is being taken under the ruse of legitimacy by a bottom feeder who paid pennies, screwed up your credit and likely violated the Fair Credit Reporting Act (FCRA) rule for “accuracy.”

They are making in excess of $10 MILLION PER YEAR at your expense, living in multi-million dollar homes in and around Virginia Beach and claim to be pillars of the community.

Contact the owners:

Steven D. Fredrickson, President & CEO, sdFredrickson@portfoliorecovery.com

Kevin P. Stevenson, CFO kpstevenson@portfoliorecovery.com

Judith S. Scott, EVP, General Counsel, jsscott@portfoliorecovery.com;

You are the reason they live so well, have luxuries beyond the dream of average consumers and act with a sense of entitlement.

● America, it’s your money that keeps them rolling, all you have to do is say ENOUGH! They buy old debts, many 10-12-15 years old and think they have a RIGHT to our money. They lie, screw up your credit, make a miserable situation even worse all in the name of MON$Y!

Let’s show these parasites the free ride is over, this our country, our money and we are sick of being ripped off by corporations who think they have that right.

Need help or referral to a consumer law professional, we can help.

assistance@consumerjustice.com

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racecar lays out a good course of action, others here like me have a different route to take. Filing a suit for FDCPA violations. One of two things will come of this, they will issue a 1099-C correction showing a zero amount and settle or they will ignore and default. That is why I would include relief of ruling the 1099-C is invalid, void and fraudulent as well as an injunction from ever collecting, selling or other wise transferring the alleged debt.

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Do you have any citation of this?

Hmm, it seems the Instructions for 1099-C have changed. It used to be on the first page and now it says:

Do not file Form 1099-C when fraudulent debt is canceled due to identity theft. Form 1099-C is to be used only for cancellations of debts for which the debtor actually incurred the underlying debt.

It used to say something to the effect of "...due to identity theft or dispute".

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I read with interest this statement and have the following to offer

Once a 1099-C is issued, the law mandates that the debt can no longer be collected. This includes PRA selling it off to another vulture. They MUST show a zero balance on your credit report and are prohibited from extending the seven-year reporting statute. PRA cannot call you or send collection notices after a 1099-C has been issued.

I have received a demand letter from Cap1 after having received a 1099-C letter within a span of 2 weeks. (1099-c) came first then the demand letter. The acct# on 1099-c and demand letter r the same. This account is not on my PERSONAL credit report, however, it may b on my biz credit report.

WTF is all this????? dont quite understand???? is it some violation. This acc

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Once a 1099-C is issued, the law mandates that the debt can no longer be collected.

I realize the IRS is a moving target, but, I don't think that's accurate. Last I read the tax instructions, the 1099 just means you owe taxes. The debt owner can still try to collect...and, if they do...you can claim a refund from the IRs.
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