Is charge off better for tax reasons than not
Date: Tue, 08/03/2010 - 11:33
I have read alot about trying to keep accounts from going to charge-off (or being sold to third partys if thats the same) in order to get better settlements. However, it seems to me that if a creditor "sells" the debt to a third party, then they can claim a loss, but CANNOT send you a 1099 since they haven't relieved you of the debt. The third party CANNOT send you a 1099 since they didn't really incur this debt (account). Does this make sense and/or is it true. If so, it seems that it may be better to settle with a third party than with CA even at a slightly higher %... Thanks for any advice
Quote:Originally Posted by AnonymousI have read alot about tryin
Quote:
Originally Posted by Anonymous I have read alot about trying to keep accounts from going to charge-off (or being sold to third partys if thats the same) in order to get better settlements. However, it seems to me that if a creditor "sells" the debt to a third party, then they can claim a loss, but CANNOT send you a 1099 since they haven't relieved you of the debt. The third party CANNOT send you a 1099 since they didn't really incur this debt (account). Does this make sense and/or is it true. If so, it seems that it may be better to settle with a third party than with CA even at a slightly higher %... Thanks for any advice |
Not so. The party that relieves you of the debt is the one that will send you the 1099. It's up to you to figure out if you're insolvent at the time the debt is settled.
