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How Do We Get My Wife’s Ex-Husband to be Completely Responsible for Their Forgiven Debt?

Written by Steve Rhode


Dear Steve,

The situation is similar to this article from 2013. My wife and her ex-husband had a loan for an RV. They divorced in 2010, and as part of the divorce decree, he was responsible for paying it off. In 2016, the bank wrote off the debt and sent a 1099-C to both parties. My wife and I did not receive it and the IRS has said that we owe back taxes and penalties for gross underreporting of income. We have contacted her ex-husband and he is willing to claim all of the debt and attempt to claim insolvency.

If he claims the debt and insolvency successfully, will we still have to pay the taxes for this? Also, how do we prove to the IRS that this is his debt?



Dear Ken,

Let me preface my answer by saying I am NOT a tax expert. You should consult with a professional tax adviser.

A divorce agreement is only an agreement between the spouses. It does not change the liability with the lender. So I can see why both parties would get a 1099-C on the forgiven debt. It remains both of their liabilities until it is paid off.

Just from life experience, it seems the best way to handle this would be to hire a tax adviser or Enrolled Agent to guide you through this.

The solution may involve filing an amended return and a Form 982 for that year the form was received.

There is no way I’m aware of where the ex-husband could take on the entire liability of the debt regardless of the divorce agreement. Your tax adviser may also talk to you about filing a Form 4598 regarding the 1099-C you never received.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

READ  How to Deal With a New 1099-C Issued on Old Debt Using Little Known IRS Form 4598

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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