i have a loan for cosmetic surgery i had a year ago. i am over 90 days late on payments, and they are reviewing my account for a charge off. if they do this will i still be able to list the account in the bankruptcy and have it discharged? cuz i read that it will be reported as income if its charged off, and i will have to pay taxes on it. its like 7,000!
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As far as I know, a chargeoff is not reported as income. Should you agree to a reduced amount settlement with the original creditor, then you can be sent a 1099 for th ediference between what you originally owed and the settlement amount. In order to receive a 1099 as income (or forgiven debt,) I believe you would have had to agree with the settlement offer. Hopefull, others can weigh in here with their experiences. -
it would be discharged in BK. The only thing that happens is that your credit report will reflect the charge off and the BK. It is like a double hit.and if you are insolvent, there is no tax as income to the IRSComment
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The only time you get a 1099 from a creditor is if it is the original creditor and you settle with them for less than owed.
For example, if you have a $100,000.00 debt with BoA and settle at 25% then they would 1099 you for $75,000.00 which you would have to report as income.
Only original creditors can 1099 you, not JDB's or CA's.Comment
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