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Just like your employer ought to be required to send a W-2 to you every year, a lender is needed send 1099 forms to any or all borrowers that debt understood. That said, just because lenders are anticipated to send 1099s does not imply that you personally automatically will get hit by using a huge tax bill. Why? In most cases, the borrower can be a corporate entity, and anjing you are just an individual guarantor.

I know that some lenders only send 1099s to the borrower. The impact of the 1099 on personal situation will vary depending on what kind of entity the borrower is (C-Corp, S-Corp, LLC, etc). Most CPAs will have the capacity to let you know that a 1099 would manifest itself.