• Report: #396787
Complaint Review:

Preferred Credit Inc

  • Submitted: Mon, December 01, 2008
  • Updated: Fri, December 05, 2008

  • Reported By:Euless Texas
Preferred Credit Inc
P.O. Box 1619 Saint Cloud, Minnesota U.S.A.

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

*Consumer Comment: Do you ever READ the complaints Laurie?

*Consumer Comment: FIGHT BACK

*Consumer Suggestion: 1099 is to report imputed income.

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This company has threatened to file form 1099 C with the IRS against me, so that any tax return I may be entitled to would be dimished or taken. This debt is about 3 years old.

I had a motorcycle accident about 3 months after buying this vacuum, and had financed the cost of the vacuum. I still made payments for as long as I was able, but I lost my job due to my injuries. I lost my place to live, and several months later, had a divorce with my wife. I have been rather low and unable to pay even monthly 'survival' bills without assistance for almost 3 years.

I just started to reach a point where I was getting on my feet. I was going to buy a truck with my tax return so I could start a second job, and be able to get all my debtors paid off. I owe less than $10,000 dollars.

If they take my tax return, then I am just as bad off as I started. I need a vehicle, there is no public transportation in my city.

I read the IRS's web site about this form, and who can file it and how it works, but I do not quite understand how this will affect me and my 2008 tax return. The total debt to this debtor is $1109.

Can they do this? What is the effect? I told them from day one what was happening, and kept them informed all along the way, shouldn't they have to wait? I have even been homeless for several months, and ended up sleeping on a family member's couch. What are my options here? Can I do anything to help myself? I am living pay check to pay check now, with less than $20 a month to spare, and I have other debtors! This is why I was going to get a second job with the acquisition of a vehicle.... Anybody got any experience with this?

Char p
Euless, Texas

This report was posted on Ripoff Report on 12/01/2008 09:32 PM and is a permanent record located here: http://www.ripoffreport.com/reports/preferred-credit-inc/saint-cloud-minnesota-56302/preferred-credit-inc-threatening-to-file-form-1099-c-against-me-and-there-by-have-any-tax-396787. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Consumer Comment

Do you ever READ the complaints Laurie?

AUTHOR: Robert - (U.S.A.)

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!
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#2 Consumer Comment


AUTHOR: Laurie - (U.S.A.)

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.

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.
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#3 Consumer Suggestion

1099 is to report imputed income.

AUTHOR: Robert - (U.S.A.)

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!
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