Preferred Credit Inc Threatening to file form 1099 C against me and there by have any tax return I may be entitled to taken away Saint Cloud Minnesota

Perhaps you should slow down long enough to actually READ the report before you shill for Bud Hibbs.

The author asked about a 1099 and the author indirectly acknowledges that the debt is correct-the author owes the $1109.

I have explained the effects of the 1099 as the author asked. IF they actually file a 1099 (I doubt they will) the filing of the 1099 is a defacto declaration that the debt is forgiven!

Start by doing the research to learn how to FIGHT BACK CORRECTLY!

www.budhibbs.com Consumer Advocate website that specializes in assisting with collection issues.


GET OFF THE PHONE -DON'T TALK TO THEM AT ALL. THEY LIE!
Everything must be in writing - certified mail return receipt.
Send the debt validation letter and if they are calling the cease communications letter. They have to prove the debt is yours before they can demand payment.
Their own invoice to you IS NOT debt validation.


Many Collection Agencies violate federal laws to "collect" on debts.

The 1099 is to report imputed income. IF they file a 1099 with the IRS (they are required to mail a copy to you if they do) what they will be doing is reporting that the $1109 you owe them is FORGIVEN and should be included as part of your total taxable income for 2008. THEY CANNOT TAKE YOUR TAX REFUND (if any refund should be due you.)

Here's an example: IF your 2008 taxible income is $20000 then the IRS will adjust your taxible income to $21109 and you will owe additional income tax on the additional $1109. Any tax refund you get will be reduced by the additional TAX liability for the $1109, not by $1109. Your income tax liability will increase only a FRACTION OF THE $1109.

NOTE that in order for this debt to be considered INCOME for you, they are declaring via the 1099 that the debt is forgiven (absolved) and this $1109 debt cannot be collected by them or anyone else in the future. If they send you a copy of the 1099, keep it FOREVER as proof the debt is absolved just in case a few years from now some junk debt buyer contacts you claiming you owe it.

From a financial point of view, it would cost you much less to pay the additional income tax on $1109 than to pay the $1109 back to them. If I were you I would HOPE that they do file a 1099 for this debt. Once they file a 1099, the debt is DEAD-no one can collect on it ever because the debt no longer exists!