Legal Question in Credit and Debt Law in Texas

Repossesion balance due

My car was repossed, sold at auction, leaving a balance due. I was contacted

by the company that did the loan and was told, that if I did not set up

payments, the entire balance would be filed as income with the IRS and I

would be responsible for the entire balance, taxes and interest the the IRS.

My question is, is this correct?


Asked on 5/11/05, 9:23 am

1 Answer from Attorneys
Sharon Campbell Sharon K. Campbell

Re: Repossesion balance due

It is true only if they file a document with the IRS stating that they are forgiving the debt. If they forgive the debt, the amount they are forgiving would be income to you and subject to income tax. I doubt they are going to do that. Call them on it by telling them to send you a copy of the document in which they state they are forgiving the debt.

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Answered on 5/11/05, 11:55 am


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