Legal Question in Credit and Debt Law in New Jersey

1099-C Sent By Plantiff

I've been back and forth with a lawsuit regarding auto loan. recently the case was dismissed because attorney didn't show. The plantiff sent a 1099-C (debt cancellation form), what does this mean? Was the debt forgiven or cancelled?


Asked on 3/14/07, 11:47 am

2 Answers from Attorneys
Jef Henninger, Esq Law Offices of Jef Henninger, Esq.

Re: 1099-C Sent By Plantiff

He's lookin to write off the debt for tax purposes.

My initial consultations are always free, so call me at 732/247/3340 to discuss your case.

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Answered on 3/14/07, 7:24 pm
John Corbett Corbett Law Firm LLC

Re: 1099-C Sent By Plantiff

It probably means that the creditor, who is on an accrual basis for its accounting, has written the debt off as a bad debt, will take a deduction for it, and needs to inform the IRS of this. If you are a business using accrual based accounting and shown this debt as an expense and deducted it from your income, you need to add it back in. Otherwise, just save the form with next year's tax information. The accounting matter does nothing for the legal claim but tells a lot about what the creditor thinks of it.

If you have any questions, check with your accountant.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 3/14/07, 1:20 pm


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