Complaint Review: CAPITAL ONE BANK (USA) N.A. - Salt Lake City Utah

Too much missing info here to be sure on the specifics.

However, it is VERY raer for an original creditor to still be involved after several years, or even after the charge off.

Usually after charge off, the debt is sold off in a portfolio.

Federal Law requires charge off 180 days after the first major delinquency if no payment has been made and debt is deemed uncollectable.

And, for proper advice, we need to know the amount. For example if it is only a few hundred bucks the taxes would be next to nothing, especially if the OP is only on disability, most likely doesn't file anyway.

This 1099 C most likely means nothing based on the fact we already have, but that IS only speculation.

And, I have fought the 1099 C thing successfully on 3 different occasions. The IRS fraud form works.

And, the tax years MUST match. You can't issue the 1099C years later after the writeoff of the debt. That is ILLEGAL, as it is tax fraud.

This 1099 C was sent solely for purposes of harassment as they know they cannot sue for the defaulted debt anymore.

My advice in the above post was generic, as the OP story was vague.

"AND that the 1099-C was NOT issued by the creditor who actually suffered the loss on the debt."

You alluded to this a few times in your post. Capitol One is not a third party collection agency. They are most likely the original creditor.

As for the SOL, the OP refers to using a "service" to "handle the problem". If this was some sort of debt management outfit, it is quite possible that they had made payments on the debt on his behalf, thereby resetting the SOL.

To the OP :I would not take tax advice from anyone here. From what you posted it is not cut-and-dried that the 1099-C is invalid and itcertainly is not apparent that itwas not issued by the original creditor.

The above tax adviceis worth what you paid for it and probably even less than that (it may cost you to follow it).

Chuck,

Don't listen to the uneducated debt collector drivel here. I have been through exactly what you are going through and can give you some information.

First, lets clarify some terminology. The bank or credit card issuer is the "creditor", and you are the "debtor". And, it's "statute" of limitations.

As far as the 1099-C goes, the ORIGINAL CREDITOR is the ONLY entity that can issue that 1099-C, AND, it can only be issued in the tax year they took the loss, which would be the tax year in which they wrote it off on their taxes.

The intent of the 1099-C is to show the debt they "forgave" as "income" for that year, as they incurred a "loss" that had to be written off.

This 1099-C that you recieved is TOTALLY ILLEGAL for several reasons, according to your post.

The first is that the debt was beyond the legal statute of limitations to take ANY action. A 1099-C IS considered a "collection action" by law.

Stay off the phone, and be very short and concise in your responses, and send those written responses via certified mail, return reciept requested. Be sure to put the certified# in the body of the letter itself, as this proves what you sent.

DO NOT include this 1099-C in this years' tax return when you file. If you file taxes at all, just do it the way you normally do.

Instead, download the IRS form from the IRS website to report TAX FRAUD, attach a copy of the 1099-C, and simply state that you did not have the indicated income of that amount in that tax year. Also explain that the debt in question was beyond the statute of limitations for collections, AND that the 1099-C was NOT issued by the creditor who actually suffered the loss on the debt.

Also, file a complaint at FTC.gov. against the debt collector, if in fact a third party debt collector is involved.

You can also file complaints with various state agencies for the state level collections violations.

In any case, if you have no income other than disability, you most likely do not pay taxes anyway, and even if you reported this 1099-C, you most likely would not cause any actual tax liability as your personal exemptions may cover it. You never gave us the dollar amount on the 1099-C. You should.

I really don't understand your complaint. It appears you were unable to pay your debt, and Capital One decided to cancel your obligation. They sent a 1099-C, which is required when debt is forgiven.

This form indicates that debt owed was cancelled, and that you failed (for whatever reason, it doesn't really matter) to pay what you owed. You were therefore "enriched" because debt was never paid. That is considered income to you and is reportable to the IRS (hence the 1099-C). You now owe tax on that enrichment.

There is no rip-off by Capital One. The IRS requires reporting of forgiven debt, and Capital One met that obligation. If anything, the only person who has failed to keep their obligation is you because you borrowed money and failed to pay it back.