Will a Foreign National Owe Taxes on a 1099-C

My question involves collection proceedings in the State of: ny

Hello,

I left the USA in 2013 with $6,000 of credit card debit. I am leaving in another country and not planning to return in the US.
I have been unable to repaid the debit for personal problems.

I wonder what happened to my debit? if there was a settlement without my presence, Do I owe any taxes on the amount forgiven?

I know the credit card company sends out a form called 1099-C with the amount forgiven to the debtor that one must file with IRS.

Can a settlement/forgiveness process be completed if someone has left and never contacted the credit card company?

pls advise

thanks

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Quoting oneblock

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My question involves collection proceedings in the State of: ny

Hello,

I left the USA in 2013 with $6,000 of credit card debit. I am leaving in another country and not planning to return in the US.
I have been unable to repaid the debit for personal problems.

I wonder what happened to my debit? if there was a settlement without my presence, Do I owe any taxes on the amount forgiven?

I know the credit card company sends out a form called 1099-C with the amount forgiven to the debtor that one must file with IRS.

Can a settlement/forgiveness process be completed if someone has left and never contacted the credit card company?

pls advise

thanks

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What was your status while you were in the country? Are you a citizen of the US, greencard holder, or did you have a visa that permitted you to work?

Green card holder was the status

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Quoting oneblock

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Green card holder was the status

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Are you maintaining your green card or have you given up your residency officially?

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Quoting llworking

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Are you maintaining your green card or have you given up your residency officially?

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what is this an interrogation? I don't know the answer, I m posting for one of my friends

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Quoting oneblock

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what is this an interrogation? I don't know the answer, I m posting for one of my friends

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I think the reason llworking is asking these questions is that a “green card” holder is treated by U.S. tax law as a resident of the U.S. Residents are taxed the same as U.S. citizens on their worldwide income. If he is for tax purposes a resident, then if the debt is discharged (canceled) by the creditor, it would clearly be income to him for U.S. income tax purposes unless of the exceptions under Internal Revenue Code section 108 applies (for a credit card those exceptions would be if he were insolvent at the time of discharge or if the discharge occurred in bankruptcy).

If he not a citizen or resident of the U.S. at the time of the discharge then under U.S. tax law he is taxed only on his U.S. source income. That would mean doing a little digging to determine how the debt discharge here would get treated. That’s why the answer to llworking’s question matters.

Can a debit de discharged (canceled) , and therefore become an income, when someone has left the country before any court proceedings?

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Quoting oneblock

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Can a debit de discharged (canceled) , and therefore become an income, when someone has left the country before any court proceedings?

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A debit isn't going to be discharged without a court order or some kind of settlement between the finance company and the debtor.

If you took off back to your country, then most likely your debit will be sold to a credit collection agency. They will find you once you enter back into the states. If you're not coming back, then you have nothing to worry about.

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Quoting oneblock

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Can a debit de discharged (canceled) , and therefore become an income, when someone has left the country before any court proceedings?

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Yes it can. But the details of the debt discharge and the debtor’s situation matter.

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Quoting Who'sThatGuy

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A debit isn't going to be discharged without a court order or some kind of settlement between the finance company and the debtor.

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I disagree. Creditors can (and sometimes do) discharge debt once they give up collection of it and take a bad debt loss deduction. Also, a discharge of the debt occurs when the statute of limitations to sue for a judgment on the debt expires.

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Quoting Taxing Matters

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Yes it can. But the details of the debt discharge and the debtor’s situation matter.



I disagree. Creditors can (and sometimes do) discharge debt once they give up collection of it and take a bad debt loss deduction. Also, a discharge of the debt occurs when the statute of limitations to sue for a judgment on the debt expires.

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so if I understand well, all the people that left the USA with credit card debits had their debit discharged and given a 1099-c and

therefore owe taxes, am I correct?