Consumer complaint received 2018-09-18
Product: Credit card or prepaid card — General-purpose credit card or charge card
Issue: Incorrect information on your report — Account information incorrect
Company: DISCOVER BANK (CA)

I have recently reviewed a copy of my personal credit reports ( XXXX, XXXX and XXXX   ) and have noticed numerous mistakes and inaccuracies in which I am bringing to your attention. 

I had a credit card account with Discover Bank, that unfortunately went into default due to a financial hardship in XX/XX/XXXX. I called on XX/XX/XXXX to Discover Bank -with the propose to resolve this debt because the account is reporting a Balance on my credit reports- I spoke with a representative named XXXX, He told me that Discover Bank just forgiven the debt and sent me a XXXX form, I asked if they are collecting the balance and he said is any balance owe to the Discover Bank and they are no longer collecting the balance. 

I verified my tax records and I received a XXXX Cancellation of Debt from Discover Bank, and subsequently had to pay the IRS the income tax due on the cancelled debt that Discover Bank reported. 

I disputed the account with the 3 credit bureaus because they are reporting a balance in my credit reports, but Discover is not longer collecting any balance and forgive the balance of the account, so I don't see the reason why the Credit Bureaus and Discover are reporting a Balance on the account. 

I have done research on the topic and would like to advise both the Credit Bureau that this issue has been litigated extensively, and that it has been decided numerous times by courts that it is inequitable to allow a creditor to belatedly enforce a debt after it received the tax benefit of the Charge-off, in addition to it being inequitable to require me to report this cancelled that as income on my federal tax return and face tax consequences and STILL hold me liable on the debt. Below,   please see all the research I have done in my favor. 

See : See, e.g., In re XXXX, XXXX XXXX XXXX, XXXX ( XXXX.  XXXX. XXXX. XXXX. XXXX  ) Discover Bank v. XXXX , XXXX XXXX . XXXX XXXX ( A ), XXXX, XXXX XXXX XXXX, XXXX ( XXXX XXXX. XXXX. XXXX ) XXXX XXXX XXXX . XXXX v. XXXX, XXXX XXXX. XXXX. XXXX XXXX ( XXXX. XXXX. XXXX. XX/XX/XXXX ) ( " It would be inequitable ... to require that [ Defendant ] report the discharge of debt as income on his federal tax return or face the potential tax consequences and hold that the plaintiff may continue to hold him liable on the debt. " ). " is in direct conflict with the Internal Revenue Code and the fact that cancellation of indebtedness income is included within a debtor 's gross income. '' Id. at XXXX. The court further determined that the issuance of a Form XXXX reflects that a financial institution has, in accordance with 26 U.S.C. 6050P and 26 C.F.R. 1.6050P-1, discharged an indebtedness. Id. at XXXX. 

I have been advised that you have thirty ( 30 ) days to begin and conclude your investigative procedures. Upon completion, I request to know the name and address of the verifying source along with a description of the process you used in contacting them. Furthermore, I request that you provide me with an updated and revised copy of my credit file reflecting your correction of these errors.