More details to this question:
This may seem like an odd question, since 1099C is by definition a debt that has already been cancelled. However, it is my understanding that the banks reserve the right to go after the debtor at a later time. I have a 1099C that was due to a shortsale about 2 years ago. Can I include it in a chapter 7 bankruptcy?
7 ANSWERS
Glen Edward Ashman
Your question mixes bankruptcy and tax law. The debt can be discharged if you qualify to file. I suspect your real question is whether you can discharge taxes as a result on the short sale, and that requires information you omitted. You need a very experienced bankruptcy lawyer. Do not act pro se.
Answered on Feb 01st, 2012 at 10:42 AM
Business Bankruptcy Attorney serving Raleigh, NC
at
J.M. Cook, P.A.
Update Your Profile
You can try. But it was not issued in connection with a bankruptcy so it is now more than just a 1099c, it has resulted in a tax debt. There is some relief if this was your primary residence though where you wouldn't have to claim the income. Talk to your accountant about it.
Answered on Jan 31st, 2012 at 1:04 PM
Bankruptcy Attorney serving Hampton, VA
at
Haven Law Group, P.C.
Update Your Profile
Absolutely. You must list all of your debts. The bankruptcy will discharge the debt.
Answered on Jan 30th, 2012 at 5:35 PM
Bankruptcy Attorney serving Hayward, CA
at
Carballo Law Offices
Update Your Profile
A 1099C is a tax liability issue and not a debt that is dischargeable in bankruptcy but bankruptcy may eliminate the tax liability if the debt was discharged.
Answered on Jan 27th, 2012 at 6:29 PM
Chapter 13 Bankruptcy Attorney serving St. Charles, MO
at
A & L, Licker Law Firm, LLC
Update Your Profile
Yes, the portion the creditor charged off is sometimes still sold to collection agencies and will be taken care of through bankruptcy.
Answered on Jan 27th, 2012 at 3:12 PM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
at
Law Offices of Deborah A. Stencel
Update Your Profile
1099 Cs are not debts and cannot be included in a bankruptcy filing. However, please do keep reading. I am not a tax attorney or professional, but from reviewing the IRS website it seems clear to me that you need to include the 1099-C in the income from the year it was issued. The next, more important question is- do you have to pay taxes on this "income." IRS rules seem clear that if the Debtor included the debt in bankruptcy or was insolvent, s/he does not have to pay taxes on the matter. Also, if the real estate was your residence and met other criteria, you should not have to pay taxes on the cancellation of the debt either. See IRS Publication 4681. It appears that if you qualify for the cancellation of debt to not be taxable, you turn in the 1099-C with your other 1099s and then fill out a separate form, Form 982, to turn in with your taxes. Be sure to bring this up to your tax preparer, including the form and publication numbers listed above. The qualified tax professional can then help you determine if you fall into an exception that prevents you from paying taxes on the cancellation of this debt.
Answered on Jan 27th, 2012 at 3:08 PM
judith runyon
It may or may not be dischargeable in a CH. 7. It depends on the year and whether you were insolvent at the time of the short sale.
Answered on Jan 27th, 2012 at 2:38 PM