taxes on Judgement

Credit card companies CAN increase your interest rate at any time. By stopping paying you defaulted even on the portion of your debt that would have been on the old rate.

You lost in court but the court decided your settled amount would be $4800, thus forcing citi to write of the balance.

soaplady is correct be sure that you use that as income on your taxes next year or you will be recieving a bill from the irs.

Citi had no choice in the matter, they had to issue the 1099-C for the amount of forgiven debt. The only good thing about this for you is that since the judge set the amount owed, Citi has to eat the $10k. They cannot sell off the remaining balance to a CA.

I am not sure that seems fair - in that it was deemed an amount not truely owed by the court - sure I shouldn't debate the 1099 - I don't think paying taxes on this makes sense

What you are all missing is that Citibank did not forgive the debt. The Court ruled on what the correct amount of the debt was. The excess was not forgiven it was determined by the Court to be invalid.

I suspect the OP has a legal claim against Citibank for fraud based on the theory of law that once a Court fixes the correct amount of a debt by awarding a Judgment, the plaintiff in this case has no right to simply increase that amount under any circumstances.

Hi Mike,

I totally understand the angst as to the 1099. It sure doesn't seem fair, but the IRS will use every opportunity to bleed more taxes out of you. But that is one of the problems with debt: you pay the creditor usurious interest, or you pay the government. Or, best, get debt free and live without credit. It's a huge rip-off anyway you slice it. Makes me want to watch Fight Club again.....

chrys