Deed in lieu of foreclosure and bankruptcy

Guest 0.10 Dollars($)

I lost my job due to car accident and my husband retired. We have stayed in our house using his retirement money and our equity money. The money went down so fast. My house is in the market for 102 days and no offer even we are doing a short sale. I have prepared all the letters, documents, paystubs that I need to send to the lender. My question is, if my house doesnt sell even I give it back to the lender and the house was appraised lower than the money owed, will the bank automatically send 1099 for the difference or do I request for it. If the house sells and lower than the amount owed, do lenders forced me to pay the difference.
I have some savings and I am using this saving now to pay our utilities, gas, medical, dental and car insurance and other bills. My husband's retirement pays now for the apartment. We have vacated the house. Do I file bankruptcy now or wait until the lender sells the house?

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi,

"Do I file bankruptcy now or wait until the lender sells the house?"

I think you need first talk to the lender and make understand your situation. See what the options are that he provides to you. Short sale or deed in lieu of foreclosure should be the last option that you take. And then you can file bankruptcy subsequently.

Thanks,
Larry

Guest 0.10 Dollars($)

No, if your home doesn't sell for the mortgage balance, the bank will automatically send you the 1099 form. But just a sec, there might be a new law coming up regarding these taxes related to 1099 form. You may not have to pay taxes on the difference between the loan balance and the sale price or maximum the tax will have to be paid on the principal amount included in the difference.

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