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If you settled a debt for less than the full amount and received a 1099-C for the rest of the debt how should this appear on your credit report?

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02/27/2013

Answer

It will show up as a charged off debt for that creditor, but they may sell the debt to another entity and start collections against you for the debt weather you put it on your taxes or not is irrelevant. However, if you do pay the debt later, you can claim the payoff as a writeoff the same as you did it initially on the taxes but in reverse. Now its a debt if you can claim the debt as a liquidated assest.