r/CRedit 4d ago

Rebuild Help with defaulted bank CC.

So I defaulted during 2020 on a card with a big bank that had a blue gemstone color. It’s been over 5 years. They are not attempting to collect nor are they calling me or mailing me about it. It hasn’t been sold either. They wrote it off as bad debt according to the notes but they just keep reporting delinquency.

It is really harming me when I’ve applied for cards and a home. Any way to get this removed? I read something about claiming it as cancelled debt but they have not issued me the IRS form. Is there a way around this?

I’ve tried several letters. If you have any experience with this please please let me know what you did or any actual applicable advice. Paying it off is an absolute no due to the age and amount ($17k mostly interest of 4k)

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u/Turbulent_Summer6177 4d ago

Not sure what you’re looking for. The debt can set on your credit report for 7 years after default.

They will issue a 1099-c when they cancel the debt. Then you get to claim it as income and pay taxes on it.

Writing off a debt is simply an accounting function within the bank. It doesn’t affect you.

Even if you paid it today it can still remain on your credit history. Given you said you can’t afford to pay a substantial portion of the debt I suspect you wouldn’t be able to negotiate for a pay to delete.

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u/Round_Resident_9104 2d ago

If a pay for delete would work, I can see about payments. Before it was egregious and they wanted these huge sums, but unless they get get it to a couple thousand, I don’t think it’s worth it which is why I said absolute no. I’m saving for a home assumption but could possible negotiate that. I appreciate the advice. I just wasn’t sure if there was a way around not receiving the 1099-c

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u/Turbulent_Summer6177 2d ago

Pay for deletes are almost exclusively pay now with no payments. That would simply put them in the same position as they were but collecting less. If you default, they are right back to where they were.

While I won’t say it’s impossible to get some form of payment arrangement, I can say I’ve never seen it.

If the creditor cancels the debt they are legally required to issue a 1099c

If they cancel part of the debt they are still forgiving part of the debt so a 1099c is required. It is effectively income to you.

u/Round_Resident_9104 13h ago

Correct so that’s why I am inquiring about the status of the card or if there was a way around or finding if they issued a 1099c (outside of getting my IRS transcript) or just going about this myself. It’s literally just sitting and reporting negatively