I had a (illegal) loan from MyCashNow which I ended up paying principal only as it was tribal. It was being "serviced" by Credit Protection Depot and I made the last payment about 4 months ago. The total principal I paid was $1380.
Today I received a 1099-C for Cancellation of Debt from Credit Protection Depot. They're basically reporting it to the IRS as a cancelled debt of $1380 and I'm supposed to declare this as income.
Any suggestions? The debt was not cancelled...I paid it.
By signing up a debt counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the payoff amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.