I have been in the Philippines since 2003. Before I left the States I paid all my balances and came to the Philippines. I had one credit card but paid that off.
I called the credit card company in 2006 and the man said that my account had been closed in 2006 for nonpayment and the balance was written off. I did not know of any charges other than what I paid off.
In 2015 I sent a letter to the card company after seeing the credit bureau report about this debt and told them it was an honest error and that I would pay the balance just send me the paper work. I never heard back from them. I was never sent a notice of the cancel debt from any source. If this account was closed in 2006 or sold to a third party who inflated the balance from $800 to $24,000, that is an apparent violation of TILA. It appears someone "re-aged" this debt and that this may be a scam.
Someone apparently re-opened that suspended and written off account, charged me interest for nearly a decade and wrote it off on their 2014 income tax, which of course showed up on my IRS account as a cancel debt which I must figure as income on my 2014 tax return.
This is a big crisis for me because I live on my social security benefit and a small $320 pension. The card company or a third party charged interest on that $800 balance and it turned into $24,041 that they took off their tax and advised IRS, and I got the cancel debt. I am not claiming insolvency here in the Philippines but it is a hardship.
When I wrote the letter to them in 2015 they had my address yet I never received any information of this action and did not find out about it until my 2014 1040 was sent back by the IRS and the cancel debt revealed.
I earn approx $15,000 on social security, and $320 in a small pension. I have no job here in the Philippines, investments, business or any other income. I have no medical insurance, medicare does not work here. I take no withholding.
This means my income goes from about $18,000 paying no taxes to $49,000 and owing the IRS about $12,000. It will take me likely the rest of my natural life to pay this off, that is if they let me make payments on it. I am 70 years old now.
Is this right for a credit card company or a third party to do? It seems to me if they absorbed the $800 in 2005/2006 that they would have had to take the $800 off their taxes as a loss in that year and not re-open the case nearly ten years adding interest to their advantage and taking off $24,000 in 2014 on their taxes. If they sold this debt to a third party and they inflated the interest to $24,000 then this is a scam and is illegal.
Any advice? Thanks, Dave