| Filing for bankruptcy will stop a forclosure, but you'd still have to make up any arrearages and continue the payments if you want to keep the house. Even if you file for BK, the lender can ask for a relief from stay to continue forclosure proceedings. If you can get it current and keep paying, you can reaffirm the mortgage and keep the house.
If the house is foreclosed on w/o bankruptcy, then it will eventually be sold at auction and if there is any deficiency between what you owed and what it sold for you would then be liable for that amount - for which they can sue you. If the lender doesn't go after a deficiency (mine forfeited its rights to one), then you *could* end up with a 1099-C - cancellation of debt income, which would have to be filed with the taxes for that year as income.
If its foreclosed WITH a bankruptcy and you give up the house, then if it sells at a deficiency you would NOT be liable for the difference and you would likely NOT get a 1099-C.
Other than that, I don't know that there are other tax repercussions at all.
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"Knowledge is Power - use it as you see fit !
I am not a lawyer or a member of the legal profession. My advice is based on research and experience, my own and others, some who practice law. You decide for yourself what actions you do or do not take from my advice.
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02-26-2003, 05:47 PM
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