2006-07-18 09:40:39 · 5 answers · asked by kattychat57 2 in Business & Finance ➔ Credit
Yes, the IRS will consider the charged off amount as income to you. The company that charged off the funds will send you a 1099 in January of next year and you will have to add that amount to your tax return paperwork.
2006-07-18 09:44:59 · answer #1 · answered by Princess of the Realm 6 · 4⤊ 0⤋
This does not have anything to do with your income tax return. The debt is not forgiven when the creditor charges it off. It is actually transferred to a collection agency or other debt buyer.
If you settle the debt for an amount less than you owe, then at that point it would have an impact. Anytime a collector settles a debt and the difference is $600 or more, they have to file that information with the IRS. This forgiven debt is treated as a form of income and you will have to pay taxes on it accordingly.
2006-07-18 18:56:48 · answer #2 · answered by Anonymous · 0⤊ 0⤋
no it does not. a charge off means that they could not collect on your debt, and they did a write off. they may end up selling your dept to a third party company that will try to collect from you. this could go on for years and years. it will stay on your credit report for a very long time. especially if the debt is sold over and over again. the only time it will effect your tax return is if they get some kind of a court order to do so.
2006-07-18 16:44:14 · answer #3 · answered by evanlah 6 · 0⤊ 0⤋
it is the biggest scam ever.. Chargeoff... Not only does it screw your credit... but does nothing to eleminate your problem. As in a few months some jerky lawyer who hates the world is going to start harassing you becuase he will get 20% of what ever he can get you to cough up... Then even if you agree to it and settle the debt, it won't change the status on your credit, it won't change the amount that you "got in income " according to the IRS due to the orriginal charge off. I was pissed off when this happened to me.
I ran into some problems. All of my creditors worked with me putting my accounts on hold and simply allowing me to pay the interest as I had done a lot of work getting affidavidts signed and sent explaining my situtaion and my proposed solution. all of them were great, except providian financial.. I had my card with them for nearly 5 years had charged and paid nearly 10 grand on this card in that time span and currently owed 1100. In 6 months my balance skyrocketed to 2400. They had changed my limit just after I called "to prevent me from charging more" and then put in me in all of the default rates and fees. When I made attempts to handle it when I could 6 months later they said screw you... and so I thought well hey I can't pay this payment and they are screwing me.. so screw them... um no... so in a years time my balance went from 1100 to 3200 and i got a charge off. Then I had happend what I described up there... agreed to pay 1300, which was what I had charged to begin with as far as my records could show. Then it was pointless, but I live in a garnishment state so they would have taken the whole thing. At that point I realized that I had been so screwed around and there was nothing that I did about it... had I had the money I would have taken them to court and fought it... which sucks as a reality... so i changed that, so I will never get screwed around again. For more info check out my "protect your family" blog on 360 as well as for more info on credit and your identity check out my "your identity" blog as well....
The funny thing is all of my other creditors all 8 of them and 15000 dollars worth of debt was paid off as owed within a few years of the event. Just goes to show what a little customer service and understanding will do...
2006-07-18 19:10:13 · answer #4 · answered by mallicoatdd 4 · 0⤊ 0⤋
Nope. Two different things here.
2006-07-18 17:29:43 · answer #5 · answered by educated guess 5 · 0⤊ 0⤋