Legal Question in Credit and Debt Law in California

Writing off the debt for tax purposes is not the same as waiving the right to collect what you owe. Chase can still report the debt as unpaid and they or the collection agency can still try to collect the debt.

Some of your options include negotiating a settlement that includes removing it from your credit report, doing nothing and waiting to to drop off after 7 years and filing for bankruptcy to get rid of it permanently.

You should consult an attorney to decide what is best for your particular situation.

Mr. Starrett is correct. The 1099-C is an accounting matter between Chase, the IRS and you. It does not affect the legal aspects of the debt. Rather than carry an non-performing asset on their books, Chase has elected to declare an expense for the money or credit you received, which from the IRS standpoint then makes it income to you. If, in the future, you repay the debt (or they collect it from you) you can deduct that from your income and they will have do declare it as income. None of that relates to the legal obligation to repay the debt, which Chase and/or the collection agency is still entitled to enforce for four years from your last payment on the debt or advance or charge on the account, whichever is later. It also does not relate to your credit report, which Chase is entitled (and probably obligated) to report as failure to repay a debt. You didn't pay it and that remains true unless and until you pay it; so it will continue to be reported as such.