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 Posted: Mon Apr 21, 2008 2:33 pm |
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Hubby had a Discover card when he turned 18. Due to his lack of responsibility, he never paid it off. Last activity and/or payment was in 1996.
This year, we started getting phone calls from Federal Pacific Credit Company in Salt Lake City, UT. 801-972-4550. I sent them two letters asking them to validate; which of course they could not because of the statue was way overdue (we are in New York). Last letter was sent in Feb of this year.
Today, we received a 1099-c form, Cancellation of Debt. No letter was with it. I Googled this form, according to what I read we need to claim this as income on our taxes, and pay taxes for it? Is that correct, since it is way past the statue?
Thanks
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Confused????
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| Posted: Mon Apr 21, 2008 2:36 pm |
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I don't know if there is a limit on when an account can be written off. I think there was a thread about it a month or two back.
From what I understand if a debt of 600 or more is written off it is considered "income" and needs to be claimed on your taxes.
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| Posted: Mon Apr 21, 2008 3:31 pm |
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Taxes are due for cancelled debt ($600 or more) regardless of the SOL. But as I understand it, if a CA can't validate the debt, they can't cancel it (1099-C), either...
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Morningstar
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| Posted: Mon Apr 21, 2008 4:01 pm |
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something else to check into--they may not be able to cancel it like this at all. If the original creditor charged it off, then they cannot charge it off again, I dont think. You may want to check into that. In either case, did you send the DV letters by certified mail? If so, no matter what they can or cannot do with that 1099-C, they most definitely cannot do anything that would be considered collection activity if you can prove that you requested validation and they never sent it. That violates section 809 of the FDCPA right there...
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| Posted: Mon Apr 21, 2008 5:47 pm |
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They can't claim a 1099-c if the OC already did that, plus they can't claim a 1099-c on a unvalidated debt, since it hasn't been established that it is in fact a legitimate debt.
This seems to be a tactic they use now to try and force collections, or as a 'punishment' for demanding validation.
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goldenbast
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| Posted: Mon Apr 21, 2008 6:08 pm |
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A write off and a charge off are two different things.
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| Posted: Tue Apr 22, 2008 8:35 am |
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I was the one who contacted my state Attorney General's office as well as the IRS. The consensus was: "If they file a 1099c they are saying that this is a legitimate debt, the party in question does owe us this money and we have the documentation to show this. If a dispute has been filed by the consumer per FDCPA then the agency in question will have to provide validation before they can file a debt cancellation/forgiveness with the 1099c"
So if they can't prove you owe it, they cannot legally file a 1099c.
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