Car about to be repo'd

[jennordhavn]

I'm just wondering once the lender repos my car (I'm 3 months delinquent) and auctions it and gets a deficiency judgment against me, etc., will they send me a 1099 for the amount of the judgment? I'm confused on this because I've read if you settle, they can send you a 1099 for the forgiven amount, but can they send you a 1099 for the total you never paid?

Any advice is appreciated as this is going to be for a large amount ($10k) as I am very upside down on the car.

[jennyn]

Nope, if it's included in bk they can't hold you liable in any way

[jennordhavn]

Nope, if it's included in bk they can't hold you liable in any way

Thanks for the information, but I haven't yet filed a BK. Not sure if I'm going to yet. I'm trying to weigh the pros and cons of filing a Ch. 13, waiting until Nov. 08 to file a Ch. 7 or not filing at all. Thanks again.

[lrprn]

Thanks for the information, but I haven't yet filed a BK. Not sure if I'm going to yet. I'm trying to weigh the pros and cons of filing a Ch. 13, waiting until Nov. 08 to file a Ch. 7 or not filing at all. Thanks again.

As I understand it, if you don't file bk, then when your car lender repossesses and later sells your car as auction, you are responsible for paying the difference between what the car sells for and the amount of your loan.

If you negotiate a deal with your lender and the lender reduces the amount of loan you owe before auctioning the car so you owe nothing to the loan, then you will owe taxes on the difference between the original loan amount and the reduced loan amount. The IRS considers that difference "income" so forces you to pay taxes on it (the 1099).

Quite a Catch-22