Since I do not need to (and will therefore not) file 1099C, I still have the question, given that there is a no deficiency provision, does the borrower need to declare the shortfall to be income?
Why would I want to voluntarily file 1099C? Is there any possible benefit of doing so? If I am audited after declaring non-business bad debt for the unpaid portion, would that trigger generation of a 1099C by the IRS or have consequences for the borrower?
