Mortgage relief act of 2015

[jmac]

Looks like it may not happen so anyone else who filed BK in 2010 getting nervous? My house still hasn't foreclosed my ex has been living in it for 4+ years for free. I'm thinking i may have been in a BK for 5 years only to get out to a big tax bill. Any thoughts on this, I'm in California.

[spidge]

Is debt in BK taxable? Are you insolvent?

[jmac]

Im not sure, i know they waited over 4 years too start foreclosure which will happen early next year which just happens to be the same year as my ch13 is over.

[despritfreya]

Debts discharged through bk ARE NOT taxable. There is no forgiveness of debt income in such instances and this has nothing to do with any "mortgage relief act".

Des.

[jmac]

Thanks, I get the Are not taxable part, but what exactly does the no forgiveness of debt income mean?

[despritfreya]

what exactly does the no forgiveness of debt income mean?

When a debt is "forgiven" the lender may issue a 1099-C. This means you now have "income" that must be reported, up to the amount forgiven, since you no longer have an obligation to repay the loan but received the benefit of the $$$.

If the underlying debt was discharged in bk, while you report the income, you also take the allowed waiver of any tax consequence. If you are not sure how to report the 1099-C and the corresponding waiver due to discharge in bankruptcy you should discuss the same with a tax professional.

Des.

[ABC]

Free rent for 4 years ? sounds good

[jmac]

Yea for her, i would of rather seen it foreclosed the first month i left lol. I can't believe it went that long, just got the papers from the court this week that they're moving forward.

[jmac]

Thanks Des, i worry because my situation is a little different, i split from my wife the same time i filed for BK by myself so not sure how that effects everything, I did add the house to my BK since she was no longer paying mortgage but i didn't expect it to be around over 4 years later( Bank of america). Im sure it has huge home owner fines also tagged on it.