Credit Card Consumers – Charge off on credit card debt?

April 19, 2011

Question by Hooper923: Charge off on credit card debt?
This does not apply to me, it's just a general question since the next bank bailout might be due to credit card defaults.

If consumers can't pay their credit cards and default and file for bankruptcy is the debt cancelled. In other words will they receive a 1099 C and have to report that as income or not.

Without the BK, I think they do, but with the BK I think the debt is cancelled.

Credit Card Consumers
Best answer:

Answer by paperdoll198
Yes, the debt is cancelled if you file bankruptcy. I think what you are talking about is when you make a settlement with a creditor, and they agree to "forgive" some of the debt, yes, that's taxable.

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