Zombie Second Mortgages, believed to have been cancelled years ago, are now resurfacing with lenders or debt collectors demanding payment for years of interest and fees.
If your lender cancelled the debt, they should have filed a Form 1099-C with the IRS, around the time the debt was cancelled. However, the 1099-C may have been filed a few years late. This document can be the key to stopping collection efforts for the debt and giving homeowners the right to bring claims against these Debt Collectors for violation of State and/or Federal Laws.
Homeowners are encouraged to contact the IRS to find out if a 1099-C was issued for their debts. A written request must be made through a 4506-T.
Fight Zombie Mortgages with a 1099-C Form
If you received a 1099-C, it means the lender told the IRS the debt was cancelled. If a collector is now trying to enforce that same debt, the 1099-C can serve as proof that you no longer owe it. This can be the evidence needed to prove a lender or servicer has no right to collect.
How to Request a 1099-C Transcript from the IRS
You can request a transcript from the IRS that will show whether any 1099-C forms were reported under your name and Social Security Number. Most Zombie Mortgages disappeared more than 10 years ago. Tax transcripts that are more than 10 years old are unavailable through online or phone services. A written request must be made with a 4506-T.
By Mail or Fax (For Tax Years More Than 10 Years Old)
For tax transcripts more than 10 years old, you must submit a paper request using Form 4506-T; they cannot be accessed online or by phone.
- Go to the IRS Form 4506-T page.
- Download and complete Form 4506-T, Request for Transcript of Tax Return.
- On Line 8, check the box for “Wage and Income Transcript.”
- On Line 9, enter the years you want to check by entering 12/31/YEAR. You can request four (4) years, so if you stopped paying in 2008; enter,”12/31/2008; 12/31/2009; 12/31/2010; and 12/31/2011”.
- Mail or fax the completed form to the address/fax number listed in the IRS instructions for your state.
The IRS provides full mailing addresses and regional fax numbers on its website.
Contact Our Office for a Free Review
If you find a 1099-C or are unsure what your transcript means, we can help. At The Law Offices of Ira J. Metrick, we can review your transcript, confirm whether the debt was cancelled, and explain your next steps. A 1099-C can quickly prove you do not owe money and stop illegal collection efforts. Contact us today for a free review and to understand your rights.
