Double dipping ?

[hammerman]

What is the name of your state (only U.S. law)? ohio.
How is it legal for a cr-card co. to write off 100% of your debt on their taxes as a loss....and then sell your debt to another company(for 10 cents on the dollar) who then comes after you for the entire amount of the same debt. How is this not double dipping by them benefitting twice from the same debt? Any help please.What is the name of your state (only U.S. law)?

 

[Proserpina]

What is the name of your state (only U.S. law)? ohio.
How is it legal for a cr-card co. to write off 100% of your debt on their taxes as a loss....and then sell your debt to another company(for 10 cents on the dollar) who then comes after you for the entire amount of the same debt. How is this not double dipping by them benefitting twice from the same debt? Any help please.What is the name of your state (only U.S. law)?

Because "write off" is a term used for accounting purposes.

 

[davew128]

What is the name of your state (only U.S. law)? ohio.
How is it legal for a cr-card co. to write off 100% of your debt on their taxes as a loss....and then sell your debt to another company(for 10 cents on the dollar) who then comes after you for the entire amount of the same debt. How is this not double dipping by them benefitting twice from the same debt? Any help please.What is the name of your state (only U.S. law)?

I guess it didn't occur to you that they have to recognize INCOME for the amount they sold the debt for after writing it off......

 

[justalayman]

have they issued a 1099 for the write-off?

but writing off some amount of debt does not result in the regaining whatever they lost to deadbeats who refuse to pay their debts to them. It is considered to be a loss to them so there is an offset to their income. It does not produce income for them to write off the debt. You paying them what you owe them plus the interest they charge would be how they would realize an income. They still have lost money since you screwed them out of whatever they loaned to you.

 

[cosine]

Selling the debt at a loss (90% of the original amount if they sold it for 10% of the original amount) and getting a tax break on that loss is not illegal at all.

What might be considered illegal is if a chain of debt buyers were to do that, each claiming the 90% loss (or greater if they sell to the next debt buyer for even less than 10%). The reality is, the first debt buyer is in for only 10% of the original face value, even though they can legally collect the full face value (plus all subsequent costs and interest). If they do write it off as a business loss, that amount they are in for, plus the collection costs and interest not gained, is the most they can write off as a business loss. And they can only write that off as an offset of their profits. So in the end, it all works out just right (assuming no one along the way jimmied the numbers and filed a false tax return).

 

[racer72]

Seems ironic to me that someone complains about the legalities of a creditor when they have no issue not paying their legally owed debt.

 

[aldaron]

Seems ironic to me that someone complains about the legalities of a creditor when they have no issue not paying their legally owed debt.

I complain about the NATIONAL debt that I legally owe all the time!

 

[TigerD]

I complain about the NATIONAL debt that I legally owe all the time!

Unless you are a congress person, you didn't choose to run up that debt.

DC

 

[cosine]

Unless you are a congress person, you didn't choose to run up that debt.

DC

You did if you voted for one or the other of the two parties that ran it up.

 

[justalayman]

You did if you voted for one or the other of the two parties that ran it up.

sorry but we live in a republic society, not a democratic one. The folks in Washington are not bound to the desires of their constituents.

 

[cosine]

sorry but we live in a republic society, not a democratic one. The folks in Washington are not bound to the desires of their constituents.

Sorry doesn't really apply. Despite the fact that most Congress critters do not vote according to the wishes of their constituents, the people do have the power to vote them out. The problem is, they just turn around and vote the other big party candidate in and the same problem happens all over again.

 

[justalayman]

actually, they generally do not have the power to vote them out, only vote them in. Only in extreme cases can a recall vote be forced. You are never voted out except in a recall election. You simply are not voted in.

but the bottom line is; the constituents do not determine how their representatives vote. As such, at best you can suggest since they voted the rep in the effectively voted for whatever but since the constituents cannot require a rep to vote in any particular manner, they do not make the decision which way the rep votes.

That's like saying because I buy a Corvette, I want GM to make the Volt. While I can refuse to spend my money with GM by buying a Maserati and if enough other people do the same, GM won't be able to spend money to build the Volt, but because I buy a vette, it doesn't mean I agree with them building the Volt. I simply have no control over it. It comes with the package. I am not asking the to build the Volt, and in fact, do not want them to but just as with our rep's, it doesn't matter.