This article will let you know how to navigate a 1099c cancellation of debt being issued by a creditor and possibly qualify for monetary damages if your credit report is not showing a zero balance after a 1099c is issued. This means that your debt has been cancelled but you now may have tax liabilities.
When can a creditor issue a 1099-C cancelation of debt on a charge-off?
A creditor may issue a 1099-c cancelation of debt for credit cards, auto loan repossessions, installment loans or student loans that have been charged-off. A charge-off means the account was closed internally due to non-payment.
A creditor is in their right to issue a 1099-c for a debt that you haven’t paid or made a settlement which didn’t pay off the entire amount.
Do you still owe the debt after a 1099-C is issued, does it mean debt is forgiven ?
You do not owe the debt is a 1099-C is issued. The 1099-c signals to the IRS that the creditor has forgiven your debt. However, you will find creditors violating the law and still trying to collect or report a balance on your credit report even after a 1099c is issued. This is not allowed and a violation of your rights.
What are you required to do after receiving 1099-C
Once a creditor issues you a 1099-C , it means they’ve reported it as a loss, and you may be required to report it as income on your personal taxes. you should consult with your tax professional to discuss this.
1099-C credit report and credit reporting requirements
If a 1099c is issued, the creditor is required to report the account with a ZERO balance. So do check your credit report to see if the lender has changed the outstanding balance to $0.
If they have not done that, then you may be entitled to monetary damages.
Because by law, the credit agencies have to pay your attorney’s fees, if you settle / win the case. So, the lawyers usually take these cases free of charge.
You can also get the issue corrected, i.e. account marked to $0 or removed from credit reports (usually removed).
Below is a list of lenders that often don’t follow the law when it comes to 1099c
What to do if Discover Bank has issued a 1099-C issue:
Discover 1099-C’s are issued for credit cards, student loans and installment loans. However, in most cases they fail to follow the law by not updating the balance on the credit report to zero.
In which case you may be entitled to damages.
What to do if Synchrony Bank has issued a 1099-C
Synchrony Bank 1099-C‘s are issued for credit cards such as Amazon, TJ Max and Lowes, is well known for issuing 1099c and not updating balances to zero on reports, thereby violating the law
What to do If Verizon Wireless has issued you a 1099-C
Verizon over their cell phone bills and equipment bills also tends to issue 1099-C’s. In case you get one , simple check your credit report to see if a zero balance is being reported
CONTACT ME : if your credit report shows a balance after you received a 1099C, you may qualify for monetary damages
Email me directly at [email protected] if your credit report shows a balance after a 1099-C is issued
It is against the law for a creditor to keep on collecting or reporting a balance on your credit report after the issuance of a 1099-C
Our associate attorneys will take legal action against the creditor and credit bureaus and get your credit report correct and may get your monetary damages without any money out of your pocket
