I can’t believe it… I received a 1099-C for $70k in private student loans—completely gone. I logged into the website, and it shows all 0s. No word from Firstmark. I was in default for a year… No idea how this happened, but I’m in shock and really happy.
Now I just have to figure out the tax situation… sigh. A win is still a win.
edit: I’m speaking to an accountant soon—will update about how this affects my taxes under the American Rescue Plan. The cancellation was issued 10/08/2024. I live in NY.
According to the American Rescue Plan, private student loans forgiven between January 1, 2021, and December 31, 2025, are exempt from federal income taxes.
Congrats!!! But you might want to challenge that 1099-C. Even though the loan was ‘forgiven,’ the American Rescue Plan says it should be tax-free for federal taxes. I’ve seen this in other posts, so I’m not sure why companies are still issuing 1099-Cs.
@Kendall
The companies still have to issue one, but there’s a line on the tax return where you list it as exempt earnings. You might need a separate worksheet. It’s similar to how they handled unemployment compensation during the pandemic.
@Kendall
That’s awesome! I really hope that’s the case (I’m in New York). I’m planning to talk to someone who knows more about this—I’m no expert! Whatever happens, though, it’s definitely better than having to deal with 15 years of payments.
@Dana
By the way, this is happening because Discover closed their student loan division and is canceling some loans instead of transferring them. It’s amazing, and I’m happy for everyone who gets to benefit from it!
@Kendall
Wow, I should’ve waited to refinance mine. I don’t miss the huge payments, though. I’m genuinely happy for everyone getting their debt forgiven over this.
Jamie said: @Kendall
Wow, I should’ve waited to refinance mine. I don’t miss the huge payments, though. I’m genuinely happy for everyone getting their debt forgiven over this.
I got transferred from Discover to Firstmark. Not sure how they decide who to cancel vs. who gets transferred. There’s no guarantee they would’ve canceled yours either, just saying.
@Dana
My Discover loans were also canceled. $70k. They didn’t send me the 1099-C, but my cosigner, who’s also in NY, is figuring it out with an accountant about whether we need to claim it.
DebtDiana said: @Dana
My Discover loans were also canceled. $70k. They didn’t send me the 1099-C, but my cosigner, who’s also in NY, is figuring it out with an accountant about whether we need to claim it.
I’m going to speak to an accountant too. Let me know what you find out!
I also received a 1099-C, but my Discover loan was discharged due to a disability. Did anyone who got a 1099-C file their taxes yet? Are you responsible for any federal or state taxes (I’m in PA)?
Noor said:
Did you get a discharge letter or just the tax form? I’d recommend confirming it and getting everything in writing, OP.
Even with a letter, it means nothing! Edfinancial gave me a payoff letter, closed my loan with the credit bureaus, then months later came after me saying they made a mistake and I still owe money. They’ve been a nightmare to deal with, and I’m still fighting them. What’s the point of the letter?
Please confirm it for sure! Even with a letter, you’re not safe, so without one, you’re definitely not in the clear
This doesn’t make sense. Did you have to submit anything to get the loan forgiveness? Are you disabled or did you file for bankruptcy? What caused your loan to be forgiven?
Avery said:
This doesn’t make sense. Did you have to submit anything to get the loan forgiveness? Are you disabled or did you file for bankruptcy? What caused your loan to be forgiven?
Discover left the student loan business and discharged everything. That’s what happened.
Avery said:
This doesn’t make sense. Did you have to submit anything to get the loan forgiveness? Are you disabled or did you file for bankruptcy? What caused your loan to be forgiven?
I honestly have no clue. I just defaulted, and that was it. Never filed for anything.