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I filed a 1099c for debt and the account was sold to a new creditor do I have to pay?
Wiki User
∙ 16y ago
You mean you received a 1099C right...you had (cancellation of debt)income because you had a bankruptcy or failed to pay what the persdon issuing it to you had loaned you. In any case, no matter what the circumstances, the facts haven't changed....just the name of who you owe that debt to. That doesn't change anything about your accounting, taxability or reporting obligation.
Wiki User
∙ 16y ago
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Does a 1099C mean the creditor has cancelled the debt?
Yes. A 1099C is confirmation from the creditor or lender that the debt has been cancelled and collection efforts have ended. The bad news is, the amount shown on the 1099C is considered taxable income and must be claimed on your federal tax return.
How do you get a 1099c?
See my answer to post "Collections after 1099c???" A creditor will send you, the debtor, (and the IRS) a copy if they have decided to cancel (forgive) your debt by issuance of a 1099c which means they will give up their right to any further collection of this debt.
Do you owe the difference on a 1099C?
See my answer to post on "collections after 1099c???" Do you mean owe the difference to a creditor? Answer no 1099c is a confirmation that a debt has been canceled by the creditor. No further obligation of repayment by debtor is expected or can be requested. This may be income to you according to the IRS whom also gets a copy of the 1099c.
Do you have to file a 1099c for credit card debt that was discharged in chapter 7 bankruptcy?
The debtor does not "file" a 1099C. The debtor may receive a 1099C from the creditor which also sends it to the IRS. The discharge of the debt in bankruptcy nullifies the 1099C. There is a form or a part of the 1040 set for disclosing this information to the IRS.
Can you stop a creditor from selling your account once you have filed bankruptcy?
No. The bankruptcy is to stop anyone who has a right to collect a debt from being able to collect, called the automatic stay. If the debt is listed in the correct debt owner's (creditor's) address and it is discharged, it does not matter who owns the debt.
Are bad debts that are written off taxable or not?
"Written off" does not always (usually) mean a debt is not still collectible. The term "forgiven" indicates that the creditor no longer considers the debt valid. When a debt is forgiven the debtor will receive a 1099C from the creditor/collector and a copy is sent to the IRS.. The debt is then considered income and must be reported on the debtor's tax return as such.
If a lender purchases a debt and cancels the debt is there a time limit for a debt cancellation?
Cancellation of debts depending on individual circumstances can take a very lengthy time. When a debt is cancelled the creditor/collector is required to send a 1099C to the debtor and the IRS. A portion of the debt then becomes taxable income.
Debt created by a business when it makes a purchase on account is term as?
Creditor
Can you pay an original creditor after the debt is sold to a collector?
No, the collection agency is now the rightful owner of the debt in question and the original creditor has removed the account from their books.
Collections after 1099c?
A 1099c is issued to a debtor and to the IRS when a debt has been canceled (or forgiven). Once a debt has been canceled (or forgiven) and a 1099c issued to the debtor and IRS, no further collection attempts shall be made. If they are, then the debt has not been canceled (or forgiven) and no 1099c should have been issued to the debtor or to the IRS. note: website: www.helpwithmybank.gov (under consumer loan-general questions section) which states that unless the bank forgave or cancelled the debt, you are still obligated to repay the loan. Also the IRS states that continued collection, the existence of a lien relating to the debt, or the sale of a debt by the creditor are direct indicators that a debt has not been canceled. note: website: www.IRS.gov pubication 525 and instruction for 1099ac for further info.The only entities that can issue 1099c are financial institutions (bank, trust company, building and loan or saving and loan associations), credit unions, federal govenment agencies, federal deposit ins. corp., resoulution trust corp, national credit union admin., any military dept., u.s. postal service, postal rate commission, a corp. that is a subsidiary of a financial institution, or an organization whose significant trade or business is the lending of money, such as a finance co., or credit card co. The average person or company not included in one of these entities can't provide a 1099c to a debtor or the IRS irregardless of monies owed to them by a debtor.A 1099c can be issued on an unpaid debt for the entire balance that is due at the time of issuing the 1099c or for the canceled portion of the debt when a debt settlement has been agreed to. Example: $5000 owed, debt settled for $2000, debt canceled is $3000. This $3000 would then be on the 1099c. Since you didn't have to pay this $3000 to the creditor the IRS considers it to be income to you unless you qualify under a few exceptions like insolvency, a dismissal of the debt in a bankruptcy filing, or it was a gift on behalf of the creditor. See above IRS website for more info.Any entity issuing a 1099c to the IRS must send a copy to the debtor. A 1099c doesn't show up on your credit report and you wouldn't know unless they sent you a copy of it as required by IRS laws. You can call the IRS to see if they have received one for you if you have concerns that they have. You can call the creditor and ask if they issued one. They must tell you and keep these records for 4 years from time of issuance according to IRS law. IRS law and banking laws govern this.Also, a charge off and a write off are different from a 1099c. A charge off or write off (pretty much same thing) is done for creditors internal accounting procedures and do notrelease your obligation to pay a debt nor does it prohibit creditor from sending account to collections agency or selling account to debt buyer. Charge off's (write off's) does not require a creditor to issue a 1099c to debtor because they are not releasing you of your obligation to pay the debt nor are they given up their rights to collect on the debt but they are merely making an accounting adjustment on their books. Nor can a debtor demand a 1099c. Why? Because a creditor that issues a 1099c to debtor is thereby canceling the debt and not requiring any further payment on the debt and will no longer try to collect on the debt as of the date of the debt being canceled (which is shown on the 1099c).If you are contacted for payment on a debt that has been been previously canceled because you have received a 1099c reflecting such you should provide copy of 1099c for proof and assert you knowledge of the law and refuse to pay anything further and demand no further collections be made. All of this should be in writing and sent certified mail to company trying to collect. Keep copies of all for proof. If you are contacted again call a consumer lawyer in your area. They are just waiting for a good lawsuit to file and work on a contingency basis so you will not need money to hire them.Also, if you have been through bankruptcy or in process of, all your debts should be listed and eventually dismissed by bk court. When debts are dismissed through bk you no longer owe them and they are not taxable to you. Send any further collectors this information in writing with bk case number and 1st page of bk doc and demand no further attempts to collect be made. Put in writing and keep copies and certified mail for proof. If attempt is made again call consumer lawyer. If you have any problem with IRS and 1099c after bankruptcy send IRS letter and copy of 1st page of bk doc. If lawyer handled your bk then they should handle any problems that arise after.
Does the creditor have to get a court order each time they levy money out of an account once they took money out the first time?
It depends on the circumstance. If for the same account or debt then no, the creditor has the right to exercise said levy until restitution is made upon that debt. If there are multiple debts with the same creditor, each debt should carry its on legal action unless consolidated by court, or your personal agreement with the creditor.
Can your checking account and wages be garnished at the same time?
Not for the same debt, but a wage garnishment can be implemented by one judgment creditor and a bank account levy by an additional judgment creditor.
