Help with debt settlemnt with BOFA
I am wondering if anyone can answer a few questions for me about a 1099 C I recently received from BOFA. If I am not in the right place I apologize. A bit of back story I was over 60K in debt with loans and credit cards and have been slowly digging out with settlements on many cards. I held out as long as I could but ultimately stopped paying the minimums as none of the CC companies would even talk deal if I was current on my payments. Back to BOFA. Today I received a 1099 C for two accounts I had with them. I am familiar with the tax filing needed if you settle for an amount greater than $600.00 in my favor, the IRS needs its money. I did not settle with them and just randomly received these. I called BOFA and asked about it and was told that the accounts are now closed with a cancellation of debt and the account though in collections was never sold outside of BOFA. I checked my credit report today and the accounts are listed as Charged Off/Written off.
My questions are:
1. Has anyone ever heard of a bank just writing off an account? I am thinking did it reach the SOL without payment?
2. If I received the 1099 C am I no longer responsible for the debt. I do not want to pay the taxes on the amount then end up being garnished for the original debt owed.
3. Has anyone had any experience with insolvency to of assets so the taxes are not owed? If so when I am filling out my insolvency worksheet do I list the original debt at the time of charge off? I am thinking that in the twisted eyes of the IRS I would not include that in the insolvency as it is charged off.
I hope this all makes sense.
Karen in MA