Legal Question in Credit and Debt Law in Florida

Re: Cancellation of credit card debt

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If a debt is forgiven, then the amount which is not collected is considered income to you. The filing of a 1099 is not only legal but the proper thing for a creditor to do, although many do not bother. The amount forgiven is considered by the IRS as taxable income to the debtor.

Scott R. Jay, Esq.