divorce, credit card & 1099's

[rlbunny]

What is the name of your state?What is the name of your state?What is the name of your state? Texas
Can a ccc issue a 1099 for debt??? Being a stay at home mom, I was blindsided by a divorce. I got a part time job & my daughter & I lived on 1 credit card for about 6 mo. When it was apparent that the ex was completely nuts, we moved in with my parents (who live on SS disablity) so I could go to school full time (medical asst.). I owe just under $5,000 on this card & tried to set up to pay $25 or $30 until I get out of school (Nov) & get a job. I have a 4.0 gpa so I know I'll get a good job. Then I could make $500.00 a mo. pymt. until it's paid off. This is all I owe. But the rep. is angry, rude & has threatened to send me a 1099 for the amount. Can they do this.
Thanks....I have to respond by the 24th.

[Ladynred]

But the rep. is angry, rude & has threatened to send me a 1099 for the amount. Can they do this.

Depends. If its the original creditor making the threats, they could send you a 1099-C, but I seriously doubt they'd do it. 1099-C is for 'cancellation of debt income' and creditors don't 'forgive' debts unless you settle for less than full. They will sell the charged-off account (if it goes that far) to a collection agency and you'll have to deal with them.

If this is a 3rd party collection agency, they cannot send 1099-C's, its a BS threat. Further, even if they DID send you a 1099-C, if you can prove to the IRS that you were insolvent when they 'cancelled' the debt, then the amount on the 1099-C does NOT have to be claimed as income on your taxes (need form 982 for insolvency).

[rlbunny]

Texas.....thanks for the info. I have been really worried about this. Since they now call my parents & inquire about their ability to pay this. My mom doesn't need this stress since she is the care giver for my dad whose had a severe stroke. Now I'll concertrate on school & let this play out & hopefully pay it off when I get a job.
Thank you

[Ladynred]

Your parents are NOT LIABLE for YOUR debts !!! In TX, original creditors ARE bound by the same restrictions as 3rd party debt collectors - they cannot discuss your debts with a 3rd party - period ! TX has is own version of the Federal Fair Debt Collection Practices Act and these scumbags are violating that law by harrassing your parents.

[rlbunny]

Thank you for the information. I have been having finals & hadn't checked my posting. I am glad to know they CAN'T discuss this with my parents. I told my mom to hang up but now I'll tell her to get their name & then tell them the act you mentioned.