1099c and IRA accounts and Chapter 7

[caliber]

What is the name of your state? NJ

I'm new to this side of the forum. Does the filing of Chaper 7 affect IRA's and once discharged is there a chance the unsecured creditors will issue 1099's or 1099c's? I'm thinking that if the unsecured debt is submitted for Chapter 7 then all of it goes, even the 1099's.

And, how much time does one have with regard to the impending law changes and Chapter 7. I'm thinking sooner rather than later.

 

[Ladynred]

The new reform bill was supposed to be debated on the Senate floor today. It has not gone for any votes yet. IF it gets passed, it would be 6 months after the Pres signs it before it becomes law. If you're going to do it..do it sooner !

You should not get any 1099-C's, the debt aren't 'cancelled', your liability for them is erased. 1099-C amounts do NOT have to be reported on your taxes as income if you can prove insolvency when the debt was 'cancelled'. Bankruptcy IS insolvency so even if someone did send you one, you would not have to add it to your income.

 

[caliber]

Thanks!

Very quick reply--many thanks. I mentioned to a friend of mine that time was not on our side. He thought that if the reform passes they would have to "grandfather" debts. I am investigating while trying to avert further legal action. The cc bank violated the agreement, but this may take months to resolve and there is always that "if" in the back of my mind. It is an unsecured cc business line just above $100k!