Re: taxes on debts

Posted by A Bill Collector on February 03, 2002 at 16:16:56:

In Reply to: taxes on debts posted by tgrilot on February 02, 2002 at 11:46:05:

To my understanding, a creditor will report any amount, over $750.00, to the IRS. This would mean that if you settled the $12,100 for 50% you would have saved $6,050. This amount would be reported as 1099-c (canceled debt) to the IRS & you would have to file it.
Really though, I would not consider a settlement if the statue of limitations has already passed. Most creditors will not agree to remove the trade line from your credit report, and if there is no chance of a suit,I would'nt bother to waste the $$. It doesnt help your credit as much as that same amount of a downpayment would help you.

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