Tax implications of mortgage paid through plan

[greenthinker]

Hi All,

We filed for Ch 13 in July 2011, and began making our plan payments in August. Our plan has not been confirmed yet, and I don't know if it will be before the end of the year or not. The problem is that we pay our mortgage payment plus arrears through the plan, and if none of those payments have been paid to the mortgage company, I'm afraid that I won't be able to deduct the interest from our income taxes for this year. This is a really scary thought because that is a huge deduction for us!

Does anyone have any experience or advice on this issue?

Thanks!

[MOMof3]

Unfortunately if the trustee hasn't paid, then there won't be any interest deductions. The mortgage company will send your tax forms as usual showing interest paid during the calendar year. Yeah, that would really suck to not have that deduction--that would kill our taxes too. I would have your attorney send a note to the trustee to find out if they can disburse as soon as confirmation happens so that the payments show up in 2011.