Q: Received 1099C after filing Chapter 13. Chapter 13 dismissed due to missing a payment. Can bank take vehicle?
Fiance filed Chapter 13 last March 2016. Our co-financed truck was included. In January of 2017 we each received a 1099C for the same amount each from the bank the truck came from. Due to lack of employment over last few months we fell behind a couple payments and trustee dismissed his case. Can bank come after the truck still?
A:
A 1099C is issued for unpaid debt which has been forgiven. Of no bankruptcy is completed, discharging the liability, then there is a tax consequence to the forgiveness of debt, it is treated as income - hence the 1099C. If a bankruptcy is completed through discharge, then there would be no tax liability. That is one issue raised in your question.
As to the truck - with the dismissal of the case, the lender can repossess the vehicle unless you make contact with them to try to bring the car payments current and obviously if the lender is willing to have you do that. It is certainly worth trying - if you have the funds to do it.
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