Cash for keys

[mountanddo]

My BF has been unemployed since June 2010. He also stopped paying his mortgage at the same time. They scheduled a sheriff sale for December 20th but it was postponed until February 8th. He is underwater in his first mortgage by 41k and he owes 43k on his HELOC. The redemption period is 6 months in Minnesota. A couple of questions....

1. What is the chance that they will postpone the sheriff sale again? Why would they have postponed it in the first place?

2. Would he be eligible for cash for keys and when would you propose he do this.

He believes that if WF offered him cash for keys that because he has his HELOC with WF as well they will just seize the check to pay on the 2nd mortgage.

Also, after the foreclosure the HELOC becomes unsecured credit I understand. Would he owe taxes on this amount if he then file BK after the foreclosure?

He has a pending work comp settlement that he may not see any compensation for. Is the BK court going to want to take this from him or not discharge his BK until he gets this settled?

[feelingnutsy]

Having had a similar situation---I would say that C4K is possible---
and as for seizing the check---it's my understanding that the first-
mortage and HELOC areas are separate at WF---to the extent that
a check wouldn't be taken back by one area from the other.

However---Minnesota has the six-month redemption period which
might make some kind of difference---and as for the HELOC being
unsecured credit---if both mortgages are included in the BK---then
it's my understanding that it's included as such---and he would owe
no taxes---unless WF would see fit to issue a 1099C---instead of a 1099A.

I'll defer to the much more knowledgeable people around here---but I hope this helps.