Only one spouse filed.. help

[PROPJET]

Filed ch. 7 and was discharged. Had a single mortgage in both spouses name. I did NOT reaffirm the mortgage debt in the bk. We since walked away from the house.

What if anything could happen to the NON filing spouse in regard to the mortgage? From mortgage holder? From IRS?

Thanks

[df04527]

I am pretty sure she will be on the hook for it but others will come along shortly with more experience to give you more info.

[LadyInTheRed]

It depends on the your state laws regarding deficiency judgements. The non-filing spouse could be on the hook for a deficiency if a deficiency is allowed under state law. Also, if the Mortgage Relief Act is not extended past 2012 and the bank forgives a deficiency after 2012, your spouse may have to pay income tax on the forgiven amount if he/she can't prove insovency at the time the debt is forgiven.

[PROPJET]

It depends on the your state laws regarding deficiency judgements. The non-filing spouse could be on the hook for a deficiency if a deficiency is allowed under state law. Also, if the Mortgage Relief Act is not extended past 2012 and the bank forgives a deficiency after 2012, your spouse may have to pay income tax on the forgiven amount if he/she can't prove insovency at the time the debt is forgiven.

The state is georgia. It is a recourse state. It is extremely rare in this state for lenders to come after people for a 1st mortgage deficiency. If they do, there are very narrow guidelines that they have to follow to make it effective. The spouse that did not file has/had no income. Would it be wise for the non filing spouse to pursue bk? I wish we did it together from the begining.. I thought I was protecting the non filing spouse by excluding from my chapter 7...

[PROPJET]

Also even if the mortgage relief act is NOT renewed, isn't there an exemption before the irs starts sending out 1099 A/C?

[LadyInTheRed]

Also even if the mortgage relief act is NOT renewed, isn't there an exemption before the irs starts sending out 1099 A/C?

It is not the IRS that sends the 1099, it's the creditor. If a debtor receives a 1099-C for forgiven debt, I am aware of two exemptions excluding the forgiven debt from income other than the exemption provided by the mortgage relief act: (1) The debt was discharged in the debtor's bankruptcy. (2) The debtor was insolvent at the time the debt was forgiven. There maby be other exemptions I am not aware of. Search the IRS website for "cancelled debt" for more info.