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1099-C's/Charged-Off Accounts

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District Court (Cal.) Says that Allegations that Defendant’s Issuance of 1099-C “May” Have Cancelled the Debt Stated a Claim for Violation of the FCRA for Reporting the “Cancelled” Debt

by Scott J. Hyman |

In Kunwar v. Capital One, N.A., 2017 WL 5991864, at *3–6 (N.D.Cal., 2017), Judge Koh allowed an FCRA claim past the pleading stage based on the argument that reporting a debt that was "cancelled" by issuance of a 1099-C rendered the reporting inaccurate. Plaintiff's complaint alleges that Defendant reported an unpaid balance in Plaintiff's account with Defendant to the CRAs,… Read More

District Court (Cal.) Says Issuance of 1099-C Might Have Discharged Debt, Making Reporting of Debt Inaccurate

by Scott J. Hyman |

In Paul Gugger, Plaintiff, v. USAA Federal Savings Bank, Defendant., 2017 WL 5552254, at *2–4 (S.D.Cal., 2017), the District Court denied a motion to dismiss a credit reporting complaint premised on the theory that a 1099-C discharged a debt, making reporting of the balance of the debt inaccurate. The Internal Revenue Code requires a creditor discharging indebtedness to file an “information… Read More

District Court (Ky.) Says FCRA Plaintiff States Claim against Auto Finance Lender Based on Issuance of 1099-C where 1099-C Form Itself Said that Debt Was Discharged By Agreement of the Parties

by Scott J. Hyman |

In Baker v. American Financial Services, Inc., 2016 WL 4030964, at *3 (W.D.Ky., 2016), Judge Stivers allowed an FCRA claim to proceed where the debtor claimed that the reporting of a debt was inaccurate because a 1099-C Form filed by the auto finance lender stated that the debt had been discharged by agreement of the parties. The parties urge the… Read More

District Court (Wash.) Addresses Effect of “Charge-off” on Debt Collector’s Right to Collect Contractual Interest Rate and State Pre-Judgment Interest Rate

by Scott J. Hyman |

In Grochowski v. Daniel N. Gordon, P.C., 2014 WL 1516586 (W.D.Wash. 2014), Judge Zilly addressed the impact of a “charge-off” on a creditor and debt collector’s right to collect the contractual rate and the state pre-judgment interest rate. Plaintiff contends that, in “charging off” plaintiff's debt, Capital One waived its right to collect interest at the contractual rate and, as… Read More

District Court (Minn.) Finds Issuance of 1099-C Did Not, by itself, Discharge Debt — But, When Combined with Other Evidence, Might Suggest an Intent to Do So

by Scott J. Hyman |

In Atchison v. Hiway Federal Credit Union, 2013 WL 1175020 (D.Minn. 2013), Judge Frank found that a creditor’s charging-off of an account and issuing a 1099-C did not by itself discharge the debt, but further discovery should be allowed before summary judgment could be granted as to whether the creditor intended for the issuance to discharge the debt. In addition,… Read More