Comments on: Foreclosures Rampant

By: Richard K. Gustafson

Richard K. Gustafson — Thu, 14 Aug 2008 07:11:13 +0000

Cheryl - With the recent passage of legislation, it certainly could be worth a phone call or two to see what the mortgage company is now able to do for you. Historically, the chances of renegotiating with the mortgage company for a lower balance have been zero. Maybe a refinancing might help since you’re still current (though I suspect the employment issues may adversely affect your ability to do this)?

By: Richard K. Gustafson

Richard K. Gustafson — Thu, 14 Aug 2008 06:23:02 +0000

Alexandra - The bankruptcy will not force anyone to refinance anything. Bankruptcy simply eliminates your obligation to pay. If the co-signor wants to keep the car, the co-signor will still be obligated to make the payments, of course.

As far as furniture debt, technically the finance company has repossession rights to take back the furniture. However, my experience is that most finance companies won’t spend the money to obtain a judgment and pay a truck and movers to come and pick up used furniture because used furniture depreciates pretty rapidly.

By: Richard K. Gustafson

Richard K. Gustafson — Thu, 14 Aug 2008 06:20:22 +0000

Annie - Yes, bankruptcy would eliminate your debt to the mortgage company. Bankruptcy can eliminate obligations to pay judgments too, whether foreclosure judgment or any other type of judgment. Keep in mind that the judgment is public record and can still be reported on credit histories, but the bankruptcy is eliminating the obligation to pay money to satisfy the debt.

By: Richard K. Gustafson

Richard K. Gustafson — Thu, 14 Aug 2008 06:18:30 +0000

Vicki M - I am not a tax expert, but bankruptcy is an exception to the IRS rule that says “forgiven” debt is taxable income to the debtor. Thus, bankruptcy is not only a way to eliminate the debt owed to the mortgage company, but could also be effective in establishing insolvency which would protect you from having to report the balance as income.

However, there could still be capital gains tax issues, so you should certainly talk to a tax professional about all the specifics.

By: cheryl

cheryl — Wed, 13 Aug 2008 15:27:56 +0000

Is there a process where a person can go to the bank and have the value of the house re-assesed and the home loan amount readjusted to reflect that amount. We have excellent credit and are not behind, but we are hanging on barely. Our house is no longer worth the same amount we purchased it for in 2005, and we will loose it, as we are unable to sell and have other financial problems due to employment moves.

By: Alexandra

Alexandra — Fri, 01 Aug 2008 02:40:36 +0000

If I have a credit card from a furniture store and I will be filing bancruptcy, will I have to give back the furniture or will the whole debt be discharged? P.S I am in Arizona

By: Alexandra

Alexandra — Fri, 01 Aug 2008 02:37:41 +0000

I am way behind on bills and in debt, I am considering filing bankruptcy. If I have a car for my self that is in my name and I also have a car that I am a cosigner on for a friend, how will that work? Will I only be allowed to keep one car and my friend will have to refinance??

By: Annie

Annie — Mon, 28 Jul 2008 08:09:29 +0000

My home recently was foreclosed on. It went back to the bank in May, however they have not sold it yet. Will I be responsible for the difference of what they claim I owe (mortgage plus all the fees) and what they eventually sell the house for? If I am responsible for the deficit, does filing bankruptcy relieve it? I ask because I was told that the deficit would actually be a judgement and judgements can not be included in a chapter 7. Is it true that is is a judgement and is it true that all judgements can not be included in a chapter 7? Thanks for your help.

By: vicki m

vicki m — Mon, 14 Jul 2008 23:25:22 +0000

Is there any way to prevent having to pay 1099 from foreclosure or short sale? Someone told me you can if you are eligible to claim “insolvency”. What is insolvency and the conditions involved?
Is there any way I can claim the debt/income from rental properties even if loan is in my son’s name? I am the 100% responsible party for these houses paying for all their payments, repairs, remodeling, & managing needed , my son was never interested in these properties, and now I’m having a hard time making payments on them. I will be filing a BK soon and have many bad RE investments from the economy change.
When they do the income check for Chap 7 qualifying does that include 1099 income from houses sold within the year or is is only last 6 month pay stubs/income from house sales,etc ? (If I sold a house 7 months ago - do they include that in my income to determine if Chap 7 eligible?) How far back does trustee search into income of Chap 7 filer?

By: Richard K. Gustafson

Richard K. Gustafson — Mon, 30 Jun 2008 17:24:56 +0000

David - yes, your bankruptcy discharge should relieve you of any debt related to the mortgage, provided you did not reaffirm the debt by signing a new agreement during the bankruptcy case.

Mary - The rule is 8 years, so since it is now 2008 and that has been more than 8 years since you last filed (I’m assuming it was a chapter 7) you are eligible right now to file another bankruptcy case.