0
Yes.
Cancellation of debt is the same as income.
Discussed many times here, frequently with Qs like write off or charge off in them.
A 1099-C is given by someone who has discharged or forgiven a debt to you. It is reported to the IRS by them on that form. (So your reporting it is telling them something they already know). As this constitutes taxable income to you, you must account for it on your return (and estimated payments before the filing). Further explanation: Lets start with a basic tax concept: If you receive something of value (from someone other than family), you have received a taxable income. (The one giving it rightfully has an expense). For example, remember the Oprah Winfrey thing where the audience got cars� And then found out they owed taxes on the value of the cars. In fact, when Oprah stepped up to pay the tax for them, she had to actually pay more than the tax on the car, (called a gross up), as the money she gave them to pay the tax is also taxable. Hand in hand with that, and the example above, if you get a loan, it is NOT taxable income. The money was exchanged for the equally valued promise to repay. So taking the example above, if a buyer receives the $100 merchandise and gives $100 value for it, obviously nothing income taxable to the buyer. But in this case the buyer receives the $100 of value and say makes a deal in year 2 that if the $100 promise it gave is forgiven for a payment of $75 sent today (frequently offered with words like "because it's all I have and otherwise you ain't getting nothing�."), then the $25 is considered a cancellation of indebtedness. COD income is taxable to the recipient. It isn't a loan/exchange of value anymore, it's a gift of value, and value, as in Oprah is taxable. While no one likes to pay tax, it is the correct outcome. The advantage is the debtor doesn't owe anything anymore, other than tax on the gift. So, simplified again: Receiving money is taxable. Receiving a loan isn't. Receiving a loan, and then saying it wasn't a loan (no repayment), so your just getting money that you don't want to pay taxes on, simply doesn't fly.
Wiki User
∙ 16y ago
Add your answer:
Earn +20 pts
How long do charge offs stay on your credit report?
Charge offs will stay on your credit report for 3 to 7 years
How do you remove charge offs credit report?
Dispute them with the credit bureaus.
Do charge-offs go off your credit after 7 years?
Yes.
How long do charge offs remain on your credit report?
The Fair Credit Reporting Act allows charge offs and collection accounts to show for 7 years, plus 180 days from the last time you paid the account (on time) immediately prior to the charge off.
Can you remove charge offs from your credit report?
Yes, it's possible to have them removed if you dispute them.
How long do charge offs stay on your credit report?
Charge offs will stay on your credit report for 3 to 7 years
How do you remove charge offs credit report?
Dispute them with the credit bureaus.
Will paying off charge offs results in a higher credit score?
Yes, your credit score will impove if you payoff charge offs, if the lender or collector reports the payment to the credit reporting agency.
How do charge offs affect your credit?
Charge offs will drastically lower your credit score, just like any negative item similar to collections, judgments, and liens. They will stay on your credit report for 7 years unless removed. The more money owed and the more recent the charge off the more it will lower your credit score. You can remove charge offs by disputing them to the credit bureaus. The credit bureaus have 30 days to verify the charge off or it must be removed from your credit report.
Do charge-offs go off your credit after 7 years?
Yes.
What website is it for credit default charge-offs which reveals actual purchase amounts of debts paid for by collection agencies spoke of in Wikipedia for credit charge-offs find out-use discovery?
Could you clarify your question?
Can you rid charge offs on your credit report if that creditor was included in your bankruptcy?
The charge offs will remain the required seven years and should be noted as included or discharged in bankruptcy.
Can a creditor remove a charge off?
Yes, a creditor can remove a charge off from your account and your credit reports. Credit bureaus can also delete charge offs from your credit report if they are disputed and not verified.
How long do charge offs remain on your credit report?
The Fair Credit Reporting Act allows charge offs and collection accounts to show for 7 years, plus 180 days from the last time you paid the account (on time) immediately prior to the charge off.
Does being in good standing with a current credit card rise your credit score even though you still have collections and chargr offs?
Keep in mind that what you have done in the last 24 months is what considered most. You can be in good standing with your credit card--but not using it properly will still affect your score. As Phil Turner said in his book titled "The Credit Bible" "If your credit card balance is over 30% of the balance, this will affect your score." Those collection account and charge offs will hurt, but not as much in 24 months.
Does it cost to have credit card protection?
Yes credit card companies usually charge a nominal fee for their protection plan.This fee can vary from company to company but ensures protection in case of lay-offs or any other disabilities which may prevent you from honoring your payments
How do you remove charge-offs from your credit report?
First of all, charge offs cannot remain on your credit report for longer than 7 years so most credit bureaus remove them after 6 years 9 months to ensure proper compliance with the law. Secondly, it's possible that those charge offs are not yours and/or that the companies in charge of the charge offs have lost the records so it is possible, although unlkely, that you can get the charge offs removed by disputing them with the credit agency. Another possibility is that one company shows the charge off and the collection agency shows an open collection. You should be able to get one of those two eliminated as they are duplicates. Finally, it is possible to contact the companies that have made the charge offs and negotiate with them to remove the charge offs in exchange for paying part or all of the charged off amount. Some companies may gladly do this whereas others will not even consider it. You could initiate conversations with the debt holder by writing a letter to the address on your credit report basically offering to pay a portion of the debt in exchange for complete deletion of the negative credit entry. In conclusion, it's better to avoid charge offs and negative credit by paying your bills on time than to try to clean up your credit report afterwards.
