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Do I need to pay back a debt in which I received a 1099C cancellation of debt on?

Shelton, CT |
Filed under: Debt discharge Tax law

Citibank issued a 1099C cancellation of debt to me on 2/24/2012. I filed this with my taxes on 4/15/2013 increasing my income by the FULL amount of the debt. I am in the process of trying to buy a house and the debt is still showing as owed monies on the credit report. I have called Citi several times and they acknowledge the 1099C being issued and that it was a cancellation of debt but when I ask them to report this to the credit bureaus they say I still owe the money plus some. Is this legal for them to ask me to pay back this loan when they issued a 1099C on it?

Attorney Answers 2

Posted

If they have cancelled the debt you might try submitting your 1099 C to the credit bureaus as proof that a debt cancellation occurred. It sounds like this is mostly a question about a disputed credit report so asking them directly to remove it may be your first step.

These statements do not constitute legal advice. They are meant to be general in nature, for any specific legal questions you should always seek the counsel of an experienced attorney.

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Posted

You should also consider amending your 2013 taxes by filing a Form 1040X and adding a
Form 982 that would excuse the payment of taxes caused by the Form 1099C. Many people are eligible to file the Form 982. It's very simple. Good luck.

Don't forget to click on the "Best Answer" button, if you appreciate this wit and wisdom. This answer is not intended to create an attorney-client relationship and may not be relied upon as legal advice. A careful examination of the facts is necessary before a legal answer may be relied on. You should consult your own attorney before taking or refraining from any legal action.

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