Cancled Debt and Collection Debt showing up on Report
2 Questions
I have a 1099-C from 2007, regarding a credit card debt that was canceled.
Just today, I was notified I had a collection account appear on my report. (I have credit guard watch).
I understand I have to claim the 1099-C on my Taxes as "income" on my report.
(1) Since I have to report this as "income", Shouldn't the "bad debt" be removed from my credit report since it has been canceled?
(2) If a collection agency picked up the debt, how can they put this on my credit report?
It seems I am being penalized 3x for one single instance of a bad debt.
time 1-the original mark on my credit
time 2-the collection agency that picked up debt
time 3-paying taxes on the debt as if it were "income".
Any advice on what I can do?
Thanks!