“Dear Steve,
I had a credit card with USAA. I didn’t pay it and they cancelled the debt. It was for 5800 dollars. I was sent a form 1099-c and it drastically reduced my tax return.
Will a cancellation of debt have any sort of positive effect on my credit?
Andy”
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The Answer
Dear Andy,
A cancellation of debt will appear as a bad mark on your credit report and that will account will be reported for seven years from the time it first went delinquent.
Be aware, that just because you received a 1099-C tax form about the debt, that has nothing to do with if it is still collectible. Expect collectors to call.
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