Re: Question- Threat from Collection Agency
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Posted by Drew
(24.59.27.46) on May 07, 2004 at 00:42:32:
In Reply to: Re: Question- Threat from Collection Agency posted by JKelly on May 06, 2004 at 23:36:00:
One other thing. I am not sure that a Collection agency can issue the 1099C. If they can and do issue you an 1099C for the forgiven portion of the debt, it is considered income to you and you will have to pay taxes on that income at your tax rate (still a lot cheaper than paying the entire amount), and what's more is that once they issue the 1099C, they can't sell the remaining portion of the debt and they can't come after you anymore because the debt is officially "gone" as it has been forgiven. So it is a threat I would welcome if I were you. They say it to scare you because people think, Oh my they are going to report it to the IRS and that seems really bad. Actually it is a great thing to have your debt officially forgiven and gone with them issuing a 1099C.
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