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Re: Credit Card Charge-offs then Bankruptcy


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Posted by LadynRed (199.91.33.254) on January 08, 2003 at 12:02:51:

In Reply to: Re: Credit Card Charge-offs then Bankruptcy posted by Last Dime on January 08, 2003 at 10:47:05:

You will NOT be issued a 1099-C for a charge-off because the debt is not wiped out, it still exists. All a charge-off means is that the company has done its accounting and reported the debt to its board as uncollectable. They get a tax break for this. BUT, the debt is still there, will probably go to a collection agency.

The ONLY way you end up with a 1099-C is if you settle for less than the amount owed. If the amount of 'cancelled' debt is $600 or more, they can (don't HAVE to) issue a 1099-C and that closes out the debt forever, that's also what you pay tax on. If they don't issue a 1099-C, watch out.. it usually means they've sold the remaining balance to a CA and they'll come after you for that. And lastly, not all companies are required to file 1099-C's.


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