What happens after a Foreclosure?

[sofokufun3]

What is the name of your state (only U.S. law)? CA

Me and an ex-partner co-bought a home back in December of 2006 and was hoping for it to sell but instead the house went into foreclosure after about 6 months. I no longer speak to my ex-partner but wanted to know: If the house is sold for a lower price, will I and this ex-partner of mine have to make-up the difference?

For example, the house was bought for $415,000+ but instead it is sold for half the price which is $200,000. Will I and my ex-partner have to make up the difference? Will we still be responsible for this property even after the bank took ownership of it? Will the IRS interfere with my tax and make me pay?

Please help. I don't know what is going to happen. The property has not been sold and is still in foreclosure and my ex-partner has medical issues and will probably die in a year or less. Will I be the only one responsible for this debt if my ex-partner die?What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?

[FlyingRon]

Acquisition loans on most California houses are non-recourse. They can't come after you for the foreclosure deficiency.

I don't know what you mean "will the IRS interfere with your tax." The discharge of the non-recourse debt here doesn't have any tax liability.

[nextwife]

So, you agreed to accept co responsibility for a mortgage and less than 6 months later you abandoned that responsibility? Six MONTHS? Why is it in FC? Why were you not paying so soon after buying?

[sofokufun3]

it's was beccause we were going to do a fixer upper and sell it very fast--which we did. We added two more bedrooms and a small bathroom. So, while trying to sell it the home market crashed and no one was buying. We both couldn't keep up the payments after that six month.

[sofokufun3]

What i meant was, will the IRS go after my paychecks and take money out of it in order for me to make up the deficiency of what i owe on the property? But you answered question.

Thank you so much for your wonderful advice.

[FlyingRon]

The IRS doesn't have an issue here if this was a non-recourse loan. The foreclosure doesn't result in a taxable event.