Reporting Cancellation of Debts

Click the down arrow to select the date the debt was canceled from the pop-up calendar or enter the date in MM/DD/YYYY format.

Reporting Analytics: Cancelled Date (Debt Cancellation subject in Loan folder and ME Debt Cancellation subject in Month-end Information\Loan Month-end folder)

The amount of the canceled debt. This amount does not include any amount the lender received in satisfaction of the debt by means of a settlement agreement, foreclosure sale, etc.

Length: 16 numeric, including thousand separators and decimal

Reporting Analytics: Cancelled Amount (Debt Cancellation subject in Loan folder and ME Debt Cancellation subject in Month-end Information\Loan Month-end folder)

The interest amount included in the canceled debt.

Length: 16 numeric, including thousand separators and decimal

Reporting Analytics: Cancelled Interest (Debt Cancellation subject in Loan folder and ME Debt Cancellation subject in Month-end Information\Loan Month-end folder)

The description of the origin of the debt, such as student loan, mortgage, or credit card expenditure.

Length: 39 alphanumeric

Reporting Analytics: Debt Description (Debt Cancellation subject in the Loan folder and a new ME Debt Cancellation subject in the Month-end Information\Loan Month-end folder)

Select this check box if the borrower is personally liable for repayment of the debt at the time the debt was created or, if modified, at the time of the last modification.

Reporting Analytics: Liability Flag (Debt Cancellation subject in Loan folder and ME Debt Cancellation subject in Month-end Information\Loan Month-end folder)

The IRS-approved value that will be reported in Box 6 of the 1099-C Form. This field cannot be blank. The valid values are:

A – Bankruptcy. A discharge in bankruptcy under Title 11 of the U.S. Code. For information on certain discharges in bankruptcy not required to be reported, see the list of exceptions in the 1099-C IRS instructions.

B – Other judicial debt relief. A cancellation or extinguishment making the debt unenforceable in a receivership, foreclosure, or similar federal non-bankruptcy or state court proceeding.

C – Statute of limitations or expiration of deficiency period. A cancellation or extinguishment when the statute of limitations for collection the debt expires, or when the statutory period for filing a claim or beginning a deficiency judgment proceeding expires. Expiration of the statute of limitations is an identifiable event only when a debtor’s affirmative statute of limitations defense is upheld in a final judgment or decision of a court and the appeal period has expired.

D – Foreclosure election. A cancellation or extinguishment when the creditor elects foreclosure remedies that by law extinguish or bar the creditor’s right to collect the debt. This event applies to a mortgage lender or holder who is barred by local law from pursuing debt collection after a “power of sale” in the mortgage or deed of trust in exercised.

E – Debt relief from probate or similar proceeding. A cancellation or extinguishment making the debt unenforceable under a probate or similar proceeding.

F – By agreement. A discharge of indebtedness under an agreement between the creditor and the debtor to cancel the debt at less than full consideration.

G – Decision or policy to discontinue collection. A discharge of indebtedness because of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt. A creditor’s defined policy can be in writing or an established business practice of the creditor. A creditor’s established practice to stop collection activity and abandon a debt when a particular nonpayment period expires is a defined policy.

H - Other actual discharge before identifiable event. A discharge of indebtedness before an identifiable event.