BK and short sale....paying taxes after closing w/BK?

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To my understanding, after you do a short sale on your home you're liable for taxes on the lost amount. My lawyer said that we would not be liable to pay the taxes because we're filing BK, but didn't explain why we weren't liable. Anyone have any experience with this? I don't want this to come back and bite us in the but a few months after discharge.

Thanks!

[kl030505]

My understanding is if you include your mortgage, or the difference between your mortgage and what the buyer paid in your bk, then you are not liable for any of the affialated taxes or fees. That debt is discharged, and so you don't owe the taxes either. The person who purchased the home is liable for the taxes.

My attorney told me that if we surrender the home, we surrender the taxes and fees. If we keep the home, we have to pay the taxes.

[ssdsco]

I don't see why anyone would do a short sale that's filing BK. Seems like more hassles and possible 1099 tax then any real benefits.

http://www.bkforum.com/showthread.php?t=17098

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Because according to the lawyers, a short sale is WAY worse than a foreclosure....I'd rather go through a little extra trouble. Afterall, that's what I'm paying my lawyer for.

[ssdsco]

Because according to the lawyers, a short sale is WAY worse than a foreclosure....I'd rather go through a little extra trouble. Afterall, that's what I'm paying my lawyer for.

Do you have short sale and foreclosure flipped ?

Please let me know of any benefits a short sale would provide for a person filing BK.

Thanks

[HHM]

Do you have short sale and foreclosure flipped ?

Please let me know of any benefits a short sale would provide for a person filing BK.

Thanks

There really is no benefit to a BK filer to doing a short sale.

[kl030505]

There really is no benefit to a BK filer to doing a short sale.

This is what my attorney told me. I also refuse to do it because I got the information from my mortgage company on what is involved in a short sale and they will not formally accept/agree to it until closing and if you have jumped through enough hoops in their opinion. I am not willing to take that risk, thus I am putting my energies elsewhere and surrendering the house as part of the ch 7.

[SinkingFast]

We had a last minute offer to sell our house out from under the brink of Foreclosure.

At first the deal had us bringing $2K to the table to close the deal. Our attny said don't do it.

We were so concerned with getting the house SOLD on our own. For down the road when we wanted to buy again.

Our attny kept telling us not to worry about it. Let the house Foreclose and Discharge the Deficiency balance in BK. It would really make no difference. We were already into 150+ days Lates.

The Agents and the buyers went back to the drawing board and put together a deal that got us even on money. So we were able to sell. Otherwise, we were gonna let the house go to Foreclosure.

When Foreclosure and BK occur together, it's viewed a 1 negative by prospective lenders down the road. Trying to sell, Short Sell, or DIL is just extra hassle for you that may not be at all beneficial.