Question How do I know when a forclosed home (included in Ch 7) is settled?

[freddy]

Our Chapter 7 bankruptcy was settled in Aug 2009. Included in our settlent was our house. We got a letter a long time ago saying it was going up for sale in Feb 2010. It is now 2011 and I still do not know if we have anything to do with the house or if the debt was relieved as part of the bankruptcy settlement. Does anyone know what may be going on? We still have access to our account online, but do not receive any mailings, etc...

Also, we have not paid anything towards the house in 2010, nor have we made any money from it in 2010. How will this affect 2010 taxes? Due to the "Mortgage Forgiveness Debt Relief Act", I do not believe we have to do anything but I am not certain.

[Charlie777]

Do you mean your Chapter 7 was DISCHARGED in Aug 2009? It sounds like you didn't reaffirm the mortgage so your debt was extinguished with the bankruptcy discharge, and you don't need the "Mortgage Forgiveness Debt Relief Act", because your loan wasn't settled, it was discharged in Bankruptcy. This is covered on Form 982 on your tax return for 2009. It woulds really come up with IRS only if lenders sent you 1099c forms for your discharged debt. What I did was to file form 982 listing the total amount of debt discharged, and checking the "Title 11" box (Title 11 is the Bankruptcy code).

Closing out the foreclosure only impacts your ability to get a mortgage on a new home. FHA will finance a home two years after bankruptcy discharge, or three years after closing the foreclosure, whichever is later.

[SunshineGal]

Hi Freddy,

Some counties in Michigan have finally caught up to the times and listed the deed records online. You may want to run a search and see if your county is one of them. If so, you can find out the status of the deed by searching for your name. If not, you can call the property appraiser/tax office and they can tell you who owns the house.

Michigan has a generous right of redemption, so you have something like 6 months from the date of Sheriff's sale as long as the house is still occupied. After the 6 months is up, the new owner has to file eviction proceedings complete with a court date. If you don't show up for court or stay longer than time granted, than the Sheriff's office can pad lock the door and leave your stuff at the curb.

SG

[Freddy03]

I have no clue - just wanted to say Hi to another "Freddy" LoL

Welcome to the forums

[freddy]

Do you mean your Chapter 7 was DISCHARGED in Aug 2009? It sounds like you didn't reaffirm the mortgage so your debt was extinguished with the bankruptcy discharge, and you don't need the "Mortgage Forgiveness Debt Relief Act", because your loan wasn't settled, it was discharged in Bankruptcy. This is covered on Form 982 on your tax return for 2009. It woulds really come up with IRS only if lenders sent you 1099c forms for your discharged debt. What I did was to file form 982 listing the total amount of debt discharged, and checking the "Title 11" box (Title 11 is the Bankruptcy code).

Closing out the foreclosure only impacts your ability to get a mortgage on a new home. FHA will finance a home two years after bankruptcy discharge, or three years after closing the foreclosure, whichever is later.

I see, thanks for the explanation...and yes, our Ch 7 was discharged...

So county records show the "Date Deed Recorded" in Sept/2009 to HUD & "Date Sold" in Feb/2010 to MetLife Home Loans (our old mortgage company). So what date would the forclosure be "closed?" Thanks again!

[LadyInTheRed]

As far as your tax return is concerned, the foreclosure and BK are irrelevant unless you receive a form 1099c in which case you will need to attach form 982 to your return as Charlie777 describes.

[SunshineGal]

I see, thanks for the explanation...and yes, our Ch 7 was discharged...

So county records show the "Date Deed Recorded" in Sept/2009 to HUD & "Date Sold" in Feb/2010 to MetLife Home Loans (our old mortgage company). So what date would the forclosure be "closed?" Thanks again!

When did your name come off the deed? That would technically be the date of the final foreclosure.

I believe from a lending perspective, they will use the date of the BK discharge since the house was included but you would still need to meet the 3 year guideline since a foreclosure was involved.