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My Ex-Husband Had His Part of Our Spousal Consolidation Loan Forgiven But I Got the 1099-C

Written by Steve Rhode


Dear Steve,

My ex-husband and I, unfortunately, consolidated our student loans into a joint consolidation loan. We divorced a number of years ago. Last year, he was discharged of his student loans last year due to disability. I was not discharged from the loan and refinanced the balance of the student loans in my name solely, which included all of the accrued interest from all the loans. The amount of his student loans that were discharged were reported on a 1099-C and sent to me under my social security number since I was listed first on the loan. Direct Loans won’t correct and reissue the 1099-C to my ex-husband since I was listed as the primary borrower on the joint loan and he was somehow secondary. My ex-husband is aware that he should be claiming that cancellation of debt on his taxes, but we don’t know how to fix this.

How can we fix this? We would like the 1099-C not attributed to me for my taxes and he wants to put it on his. Also, since they were discharged since he is disabled, will the IRS consider this on his taxes or just look to me to pay the taxes on the cancellation? In a perfect world, the 1099-C would be removed from my liability and applied to his taxes… and then he could receive credit/benefit due to his disability and lack of income that would reduce the amount he owes. While sympathetic to his situation, I would rather not have to pay $7,000 in taxes on a discharge that wasn’t mine. Thank you for your time.



Dear Kelly,

In a situation like yours, while your ex-husband had his loans included forgiven by a disability discharge, you will still be responsible for the remaining loan balance and both of your names may remain on the loan.

For more on this, see this previous answer.

READ  A Chase Bank 1099-C for an Old HELOC Has Us Stumped

Regarding the 1099-C it sounds like an administrative issue and a tax reporting issue. When you and another person are jointly and severally liable for a debt that is canceled, each of you may get a Form 1099-C showing the entire amount of the canceled debt.

The amount you must report is dependent on a number of factors. Please see this post for details.

So just because you received a 1099-C it does not mean you need to pay the tax on the forgiven debt. As always, please seek tax advice from a competent local professional or your tax prep software support.

I’m not a tax professional and don’t play one on TV.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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