I have a First USA account that was discharged in Chapter 7 Bk. Like everyone else, they are reporting a Charge-Off. What would happen if I request an IRS 1099-C from them for this year? Under the IRS rules, a charge-off is a written-off debt and requires that company to send you a 1099-C for any amount written-off over $600. If they refuse, can this be a way to catch them in a lie.....reporting a charge-off instead of a Bankruptcy?
Why do you want a 1099? do you really want to pay income tax on a bk discharged debt? This isn't the best way to handle it. Dispute it.
No, I think BellyUp raises an interesting point. Disputing with FirstUSA has proved pointless for most people post BK - they just verify the info as correct, in flagrant violation of BK statutes. You might want to directly email Butch or PsychDoc with the question, or, alternately, post this on www.chat-cards.com to the attention of Brent Weiss - he was gathering info for a class action suit. Good luck to you Poochie
Yes, I already sent my paperwork to Brett. Even if FirstUSa did send me a 1099-C.....it would be illegal, since the account was discharged in bankruptcy. I am trying to get them to report it correctly, I have already disputed 8 times with the credit bureaus and twice with FirstUSa....and they keep verifying the account as accurate.....a Charge-fff with balance due. By the way, they charged off the account during the Bankruptcy stay. Also, on a previous dispute with FirstUsa, they sent me a letter saying the account was sold to weinstein....and the credit report verified that. Then the following month FirstUSa sent me another letter saying they were reporting a Charge-off. How can they do that...if the account was sold?
I'd email Butch or Psychdoc, and start prepping a lawsuit. You may have them on FDCPA violations as well as contempt of BK courts - the BK judge might nail them on acting during a stay.
I am thinking about contacting my lawyer again.....he is a trustee. I want to see if I can get a letter from the Bankruptcy court to have my accounts reported correctly.
Go right ahead, but I'd also try to find a way to nail them on some violations - might as well get them with some punitive damages as well if it puts a little $$$ in your pocket!
just a sidenote on this thread... You won't be able to file a FDCPA or FCRA case independent from the BK court if the subject matter deals with accounts which were discharged in Bankruptcy. You will need to petition the BK court to reopen your case, file a motion for sanctions and contempt and let the BK judge handle it. Its a pretty clear cut thing and the BK courts usually don't hesitate to hear the charges. Creditors and CAs are usually terrified of standing before the BK judge--they know that if they are found in contempt they will get the Holy Crap slapped out of them. The BK judge will also be able to hear FDCPA or FCRA violations and rule on those issues as well. Just thought I'd toss that in
Wow Bellyup, Your case makes me feel exceptional lucky! I disputed both our Experian reports and Transunion and had no trouble getting FirstUSA to correct the tradeline. They even dropped off my Experian because I guess they didn't respond fast enough. Our others are now listed as IIB $0 balance, $0 due. We are going to work on the Equifax after christmas. Crossed fingers that turns out well too. Sorry you are having problems, like I guess so many others are. I know we disputed online through their service so I don't know if that made a difference at all. Good luck!
Yes, mine were updated too.....but the following month FirstUSa put them back. Check your report again in a month or so.
That was in late Sept and as of yesterday it hasn't come back...so I'll keep my fingers crossed that it never comes back and that they update and keep the equifax correct too when I do that one.
They are messing with me again also. On my TU report, they are reporting as FUSA and Bank One, as two different tradelines. They just started that, and my fico dropped 100 points! Also, even though I filed Chap 7 in Jul '03, and was dc'd in October of '03, they show the card as not being closed until Nov '04 (re-aged). They do not care about the credit laws, because noone is enforcing them. They tell lie after lie when you talk to them on the phone.
It has been 3 months since I got new credit reports, after all the dispute letters I sent, I was waiting for things to settle down. I want to make sure that First USA sends me a 1099-C with the bankruptcy box checked...that way no taxes are due on it. If the box is not checked, then I'll go over to the IRS building here (with my discharge papers and schedule F) and have the IRS make them send me a corrected one. By getting that 1099-C with the bankruptcy box checked from First USA...is just more evidence for me that the they acknowledge the account was discharged in bankruptcy...and reporting it incorrectly to the credit bureaus. After hearing FIRST USA tell me several times that they don't report bankruptcies, they just might violate the law and not send me that 1099-C...That might be good too, then I can still go to the IRS and report them. (First USA by law (IRC Section 108), has to send me a 1099-C for the year in which the amount was discharged. You do not have to pay income taxes on that amount if it was discharged in bankruptcy or if you are insolvent.) I'm building my case...
