Shall I file for BK?

[wakeupcall]

[FreshLikeADaisy]

Wakeupcall, it may not be in your best interest to file bk unless by doing so you avoid a deficiency judgement on each property you allow to go to foreclosure.

You might want to check out IRS Publication 908, which talks about insolvency and tax relief on forgiven debt (such as on a 1099A or 1099C) if that debt was forgiven while the person was in a state of insolvency. You don't have to file bk to prove insolvency per IRS rules, although I would imagine it helps.

This is pretty much all I know; seems to me like the first questions you would want to check out are 1) does your state allow mortgage lenders to pursue deficiency judgements; and 2) does your financial situation at the time of foreclosure meet IRS insolvency guidelines. You can google the first, but if there's any doubt you will probably want to meet with a tax pro for the second, just to be sure.

Good luck!!!

P.S. Here's the link for the IRS publication: http://www.irs.gov/publications/p908/ar02.html

[phoenyx]

You can also view http://en.wikipedia.org/wiki/Cancell...of_debt_income which is a wikipedia article that I have contributed to, covering IRS publication 908. It's best to also be familiar with the contents of IRS publication 908, but it can be confusing at times since it's written by the IRS.

[FreshLikeADaisy]

Heh, good point, Phoenyx. The IRS ain't known for its writing skills.