Re: Reporting credit card debt to IRS?

Posted by LadynRed (66.20.107.167) on February 01, 2003 at 12:52:39:

In Reply to: Reporting credit card debt to IRS? posted by anon on February 01, 2003 at 12:14:37:

They're full of CRAP !!!!! They cannot and WILL not report your entire debt to the IRS, they're using a scare tactic, pure and simple.

At 180 days of non-payment it gets charge-off - an accounting function that gets the bad debt OFF their books. THEY get a tax break from the IRS, it has NO affect on you.

The ONLY time a 1099 is issued is if you were to settle it for less than the full balance owed. If you the amount of the cancelled debt is more than $600, they MAY issue you a 1099-C, though that doesn't always happen. Usually it goes to collection agencies.

These people are pulling your chain and giving you baloney for information - ignore them. If you can't pay it and get it changed on your CR to 'paid as agreed' or 'paid in full' then your credit report will NOT be in good standing if it says 'paid - settled for less than owed' or 'paid collection'.

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