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1099 c cancellation of debt

Posted on: 19th May, 2010 10:50 am
I recieved a 1099 c cancellation of debt Jan 2010
Re: foreclosure on a parcel of land in Massachusetts
April 2010 I am now being sued for the same amount as per the 1099c
If the debt is cancelled why is the bank now pursuing me in court. They took the tax break and are now looking to collect. Has anyone been down this road.
Thanks
Hi turnpikere,

Many of us believe that when we receive 1099-C Form from lenders, the debt is forgiven and the lenders cannot come after us for the deficiency. But this is not true. Lenders can sue borrowers even after issuing 1099-C Form. In fact, an Arizona court had ruled in the recent past that sending 1099-C Form to borrowers does not legally preclude the lenders from suing them for the deficiency. The laws however do vary from state to state and from one situation to another.

You can check out the following blog to know more about this:
"http://ascpa.wordpress.com/2009/12/30/1099c-issuance-and-debt-forgiveness-arent-necessarily-the-same-thing/"
Posted on: 19th May, 2010 09:55 pm
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