If a debt is cancelled by a 1099 c with the irs, can it be sold to an collection agency?
Collection agencies do not buy debts. If they are bugging you, then your debt was not cancelled. It is active. There are companies that buy loans but they are not collection agencies. If one has bought your loan, then you owe them, not the original company that you screwed.
Pascal the Gambler
No. Cancelled means canceled.
real estate guy
of course. The person you owed the money to has decided not to waste any thing else on the deadbeat that owes them the money. So THEY cancelled the debt and issued a 1099. The 1099 means that you owe taxes on their loss. But that means that you STILL owe the money. You can't just walk away.
Yes. Some 1099-C debt is listed because the lender failed to take any collection activity for 3 years. 3 years is less than the statute for collections, so the debt can be sold. If someone includes the 1099-C as income and then later pays any part of it, they can amend the first return if the statute for amending is still open.