Are My Credit Score and I Screwed after a Debt Cancellation?
February 1, 2013 5:17 PM Subscribe
Was negotiating with the lender (credit card) and was prepared and arranged to pay the full amount this spring. Today I received a 1099-C IRS form notifying me that the debt has been cancelled.
posted by snsranch to law & government (2 answers total) 4 users marked this as a favorite
I've been working really hard to pay off all of my debt and clean up my credit score so that I can refi my home and this seems to be a serious setback.
What can I expect now? Can I still negotiate or pay in full to clean up my credit? Is this going to be on my report for 7 years? Since I'm reporting this to the IRS as income, can the lender still sell my debt to a collector?
This was my last debt to pay off other than a tiny amount to Sprint, my wife's car and our mortgage. I was just about to take a loan from my TSP to pay in full, repair my credit score and after some work with the credit agencies, refinance my home.
Any advice or anecdotes about what I should know or expect are greatly appreciated.
Thanks in advance.