1099c for an auto loan

GAP is just a form of insurance. It would have generally been issued by an insurance company, not by the lender.

Just like you would file an insurance claim with your regular insurance company, you would have had to file a separate claim with the GAP producer so that they could pay the lender. (Although I'm not sure why your bank wouldn't tell you that, seeing as they would obviously want that money).

If the bank indeed had to write off $8900, then the IRS would have required them to file a 1099c. But you should call the bank and ask them what it is all about.

I signed that Im not responsable for the amount. They called it a "Gap Amount" not gap insurance. What I need to know is it legal? Will this effect my credit rating as being canceled debt or forgiven debt. Why am I responsable for an amount of taxes for the gap that I wasnt responsable in the first place. Shouldnt the bank advise me that if this happens I would be responsable for the taxes on an amount I am not responsable for.

Do you still have copies of your loan documents?

As a lender, anytime I've bought car paper with GAP on it, the GAP has a separate rider that goes with it and instuctions how to use it. GAP, as I've always dealt with it, is an ancillary product that is issued/sold by the car dealership (just like you might buy a separate extended warranty or credit life insurance, those too are sold by dealer, not the bank). Usually they charge you for the GAP coverage and it is usually financed as part of the overall sale. I'm willing to bet that if you look at your financing contract, you'll see a charge for GAP insurance.

Everything that pertains to GAP should be outlined in writing, and you should have copies of it that were given to you when you signed. You should read it to see what your responsibilities are.

If you don't have your documents anymore, you could try to ask the bank for copies. Or you could go back to the car dealer and ask them to pull your deal bag, they should also have copies in their file.

I understand this is frustrating for you ... but my comparison is like filing a medical claim when you go to the doctor. Usually the doctor's office will file a claim for you and you don't have to worry about paying the doctor. But sometimes it is your responsibility to file a claim directly with the insurer, and if you don't then you're still on the hook to pay the doctor.

I have the paper here. Although I didnt pay an actual fee for the gap insurance I signed an adendum contract saying I wasnt responsable for the Gap amount. I wish I could post it here for you to see.

Does it say anything about filing a claim? Does it say who issued it (administrator)? Or is it on the banks stationary?

The bottom line is that, if the bank did incur an $8900 loss as a result of a GAP policy they issued, then you are absolutely correct -- they shouldn't be filing a 1099C. That is akin to your auto insurance sending you a 1099 when they pay out accident claims (which they don't ever do, by the way).

The only way they could justify sending you a 1099C was if that balance was forgiven as the result of GAP that never paid out its claim due to your own inaction.

I'm just finding it hard to believe that a bank issued their own GAP. Usually GAP is issued by an insurance company.