credit card debt

What is the name of your state? Texas
I have a credit card that a family member got and ran a high bal 5,800.00, the way I found out was trying to get my house refinanced for a second mortage because lost of job due to illiness. In stead of getting charges on relative decided to contact cc and see if they would do a 40% charge off. They will not deduce any and this has been almost 9 months of trying to deal with them. they have added interest and late fees till now it's 7200.00 I can't pay it . Today they said they are sending a 1099 to IRS since it was all cash advance and I would have to pay income tax on it since it would be concidered income. Also that would not settle the account. That it would continue to draw interest until it was paid and each year that amount would be turned into IRS. Also they could come and not take my home but any other property car, etc. to statisfy the amount. What is true?

Basically, yes. They could sue you and eventually seize your personal property. They can also send the 1099 to the IRS.

If I were you, I'd file charges against the relative. Then, you'd be able to get rid of the debt by claiming fraud with the credit card issuer.

Also, how about asking the relative to pay up? Or go to jail.....

Oh my is there nothing I can do but put relative in jail? I just don't have the money and they will not reduce the amount. Also this is and unsecured cc that was got over the internet.

You have two choices:

1) Pay off the balance.

2) Contact the police and press charges.

Doing number 2 will relieve you of any responsibility for the debt.

Remember, your relative comitted a crime. Not only did they comit a crime, but now they are apparently expecting you to pay the price for their crime.

Call the police.

[Ladynred]

1099-C's are issued for CANCELLED debt, not charge-offs. Cancelling = forgiving you the debt - meaning they stop trying to collect on it and you wouldn't have to pay it. In no other situation that I've found in the FDIC rules or the IRS have I seen where they can issue a 1099-C for what they are claiming. I've read on another board of a company threatening the very same thing, and everything I've researched says its pure bull - a hot-air threat to scare you.

Thank you Lady for your research. I have another ? will the 1099-c be for the cash advance only or for the interest too? They explained it would be concidered income so I don't see how they can claim interest as income on me. What do you think?Also if they don't file the 1099 and press charges for payment, they threatened taking personal property or jail time is this possible? Can they take my son's home in which I was a co-buyer? I have nothing left for them to take my cancer has wiped me out that is why I needed a settlement and the relative that is taking care of me and letting me live with them is the one that ran up the bill so I can't file charges there. A real mess **************.huh? So if the 1099-c is turned in the debt is settled right?

[Ladynred]

No. Let me try to clarify. IF you SETTLE with them, make a deal to pay them LESS than the full balance, THEN you may get a 1099-C to be included with your taxes as income, yes. If you do NOT settle, they will NOT send in a 1099-C on a debt they are still trying to collect from you as they have not FORGIVEN you the debt. They do NOT send out 1099-C's for charged-off debts. Charge-offs are purely an internal accounting procedure for THEIR tax purposes. Since they are NOT forgiving you the debt, they won't be sending anything to the IRS unless you do SETTLE.

So, settlement = 1099-C and reported to the IRS. No settlement, NO 1099-C.

Next, they can NOT 'press charges for debt'. There is NO debtor's prison in the US !! Their threat of jail time is an ILLEGAL THREAT - do NOT fall for this, its more of their bull.

Further, they can NOT take any of your property ! IF they did sue you and IF they won and got a judgment, there are exemptions from judgments just as in bankruptcy. Anything on the exemption list they CANNOT TOUCH.

TX has an unlimited homestead exemption and they cannot garnish wages. They can go after bank accounts and non-exempt assets. Here's a link to the list of TX exemptions:

[url]http://www.thebankruptcysite.com/exemptions/texas.htm[/url]

Anything NOT on that list is vulnerable.

If the account has been charged-off, then you can probably negotiate a settlement, but only do so on YOUR TERMS. Here's a link to a site with good information on settlements, how to negotiate and what terms to include:

[url]http://www.creditifocenter.com[/url]

You also should read the FDCPA - you need to learn your rights and what the collection agencies can NOT do or say to try to collect. Threats of jail and siezure of property that can't be taken are ILLEGAL tactics.

The FDCPA is here: [url]http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm[/url]