Received 1099c cancellation debt but they have a lien on my house

[efthompson]

I received a 1099-c for cancellation of credit card debt however, they already have a judgement against me from court and there is a lien on my home. Wouldn't that be considered double charging me?

[efthompson]

Listen Turbo tax answers, you're NOT reading the question.

[fanfare]

When did all this happen? do you have an attorney ?

[Patrice · Accepted solution]

No, this would not be considered as double charging you.  In most situations, if you receive a Form 1099-C from a lender after negotiating a debt cancellation with them, you'll have to report the amount on that form to the Internal Revenue Service as taxable income. However, you might consider it unfair that a debt you successfully cancel or negotiate away comes back to haunt you as taxable income especially since they have issued a lien on your property. However, the IRS classifies cancelled debt as income because you received a payment you didn't return.

[Edited 4/4/2017|3:11pm]