If you have received a 1099c, you may be wondering if you are responsible for paying the debt still.
This depends on how the debt was ‘forgiven’. For example, if you made a settlement with your credit card company, meaning that you made a deal with them to pay a percentage of what you owed (regardless if it was in lump sum or in installments), then the 1099c you receive will be on the remainder of the debt (the portion that was forgiven) and you will not have to pay this back but you may have to claim it as income to the IRS. If you receive a 1099c stating that the debt was forgiven, meaning the creditor has ‘canceled’ the debt and will no longer collect on it, you should contact the creditor to make sure that the debt has been forgiven and you do not owe any money on it. Make sure that the debt hasn’t been simply ‘charged off’ and sent to another collection agency. If that is truly the case and the letter wasn’t sent in error, you no longer have to pay the debt but you may have to claim the entire balance owed as income.