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Debt Consolidation Forums US tax system and impact on debt

Insolvency Calculation for 1099-c





Sub: Insolvency Calculation for 1099-c
Fri, 26/06/2009 18:11

Hi,

I am in the process of settling over 120K in credit card debt spread over 4 different cards for about 25K. I am planning on submitting a worksheet showing insolvency but had a few questions:

1. In calculating total liabilities, how do I account for the current debt? Do I show the 120K as my credit card debt, the 25K settlement value as credit card debt or do I have to keep these debts out of the equation completely?

2. The CC companies state that they will be issuing a 1099-c by Jan 31. Will I have to wait to calculate my debt/assets at that time (Jan 31) or will the 1099-c show a specific date during the year when the debt was written off?

3. If the credit card debts are written off at different times, so I need to calculate my assets/liabilities for each time period?

Thanks,

Rick



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