Report Of Discharged Debts To Irs

[puddin]

Does anyone have any information on this process? Is it optional with lenders? How will I know if the discharged debts have been reported to IRS? What if those debts were community debts in a now dissolved community?

Thanks in advance for any replies/assistance/information.

[StaciMM]

Debts discharged by BK are not an issue for the IRS. Forgiven balances, thru debt settlement, are another story. If you settled an account for less than was owed you may get a 1099 in Jan.

Its not absolute that you will get one, but that they can send it-if the forgiven amount was over $600. I settled a credit card a few years ago and an auto deficiency (totalled, no gap insurance). I don't recall how much was forgiven on the card, but I paid about $1500 towards a $3000 balance on the car, and they did not send a 1099. (Whew!)