1099-c and debt collection

How did they seize your bank account? Did they have a judgment against you? Were you notified that you were being sued?

I received the notice of judgment after the fact. No summons was issued.

A summons must be issued in order to secure the judgement. Find out which court awarded the judgement and obtain a copy of the file (Check JP courts as well). Once you get a copy, look for method of service. How long ago was the judgement awarded? Also, issuance of a 1099-c may not extinguish the underlying debt.

Under what circumstances does the cancellation of debt still permit the collection of the debt? I've looked all over the web for that answer and can't find it.

Many thanks.

Here's a link on 1099-C's from the IRS Website:

http://www.irs.gov/

Nowhere in the IRS instruction does it specify that reporting the debt as forgiven means that it cannot still be collected or sold to someone else and collected. The General Counsel of the IRS has pretty explicitly stated that the issuance of the 1099c does not prohibit subsequent collection of the debt

Thanks again. I'd actually found the same text of your post in the archives, but with an old link to the IRS.

The collection agency's claim of "legal guidance" to continue pursuing the debt has not been substantiated by them, and again, I can't find any validation of it on the web past what you've mentioned in your post.

I'm in no position to engage a lawyer to fight a protracted battle with these folks if there is precedent in their favor.

What is the best recourse?

The 1099-c by itself won't help you. You also need a Settled in Full letter and a copy of the cashed check assuming you settled it. I would suggest trying to get the judgment vacated though by filing for improper service. At a minimum you could at least make them fight to collect and chances are you would probably win if this debt is really old. You can do all of that without a lawyer for almost free other than court cost to file and worse case scenario you just end up owing them what the are collecting now.

The debt was not settled prior to the 1099-c, so I'm guessing a Settled In Full letter would not be possible? I'm very new (and late) in becoming knowledgeable about these practices, so forgive my novice questions.

OK I'm confused. Guest, are you the OP of this thread?

On a side note I would not pay tax on a 1099-c over an aledged debt unless I had a settled in full letter to go along with it. I would have disputed the debt and the 1099c. You could try to go to the source that filed the 1099c and ask for a settled letter but it is very unlikely they will give one. You could also try to amend your taxes to recover the tax you paid on the 1099c especially since you are now paying on the debt. Basically you are getting the shaft from every angle right now. You should not have to pay tax on forgiven debt when it is not really forgiven and you are being forced to pay that debt. What happend here is they wrote the debt off as uncollected and filed 1099c so they could get a tax break and then they sold the debt to make even more money and now the person that bought the debt got a default judgment probably illegally and scarfed your bank account. I would also file for improper service with the court so you can get the judgment vacated and get your money back.

We sold our home on a short sale for$211K in California. We now live in Illinois. We owed $259K. The bank just issued a 1099c for the full $259K. It should be the difference between the two. I have called and can't get them to redo the 1099 c. What do I do now? How do I prove they are wrong??? It will kill us on our taxes and my tax lady says we need to get a new form from them. Thanks,Trina

tsouthe what was the original loan amount? I'm sure you already climbed the chain of command with the loan giver, if not the first person you talk to is usually a flunky and just repeats over and over there is nothing we can do. Get a MANAGER on the phone or better yet contact the office or bank where loan was purchased and talk to whoever signed papers with you. if all else fails find a good tax attorney and pay for a hour or 2 of his time, will cost less then if IRS gets ahold of you

.here is some info on 1099c According to the WV General's Office, "In the case of a debt that has been disputed and cannot be proven a 1099c is not a valid option for a CA to file. By filing the 1099c they are saying that yes this is that persons debt and we can prove it is. However if they cannot validate they cannot file the 1099c". ...they suggested the recipient of the 1099-C file a complaint with our State's AG office or file a civil suit or both

I have a question. I have a cancellation of debt for 900 on a credit card. I already got my refund back and was wondering if I could file this 1099-c next year in 2009

You can wait to ammend, but be warned, they will more then likely catch it sometime this summer, and the interest will continue to rack up until you pay it back. Just went thru it this yr. 1150 turned into 1306 and I got a letter stating they were going to seek other options, such as leining property, if we didn't pay. We weren't expecting our refund for another week. I called and they just took it out of our refund. You could set up a payment agreement too, once they notify you that they've caught it.

i was issued a 1099-c on my 2006 taxes n now i got a summons that i am being sued for the same credit card company what do i do

Something does not seem right about this. A 1099-c is basically a company saying that this is a proven debt that has been forgiven and will not be collected. They file the papers and get a tax break and the debtor has to pay taxes because this is 'money' they got.

So how can a collector then turn around and collect upon the debt or sell it? Seems to me this is tax fraud!!!! If anyone is speaking to a Tax professional, I hope they will bring this issue up and then come back and let us know!!!

If this is something the CAs are getting away with and the IRS never intended for this to happen, then they need to be made aware that these CA/debt buyers are doing this......I bet it would be considered tax fraud if someone made a big enough stink about it.

For those of you who have paid taxes on the 1099-c and are now being sued or collected upon this same debt...you should go straight to the IRS and work your way up the chain, complaining very loudly.

Sounds like you should apply for a job with Hunt and Henrique, a CA feeding off of people that have run into hard times. They're looking for someone that can "push collection and know the law." Hmmm.

This is all new to me I just received a call from a CA regarding a credit card charge off over 20 years ago well beyond statue of limits. I haven't heard anything regarding this matter is over 12 years. Now the CA attempting to either collect or 1099-c I just started researching this stuff today and this is real measy business. It appears CA's can still attempt collections after 1099-c filing as well. How should I proceed?

I received a phone call outta the blue a couple days ago from a JDC attempting to recover payment which I resfused, They said or threaten to send to irs 1099c for double the amount of the original. I requested a letter of validation which they wouldn't provide. How should I proceed..