 MICHAELDEGAGNE
Joined: 18 Apr 2009
Posts: 1
1.40 Dollars($)
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 Posted: Sat Apr 18, 2009 12:53 pm Post subject: Chapter 13 or foreclosure? |
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So I am facing foreclosure on a property in Massachusetts. The property value has dropped considerably and I bought in on one of those fishy 0 down sub prime messes. So I am facing foreclosure but I am unsure if i should file for chapter 13 bankruptcy (i make 3,000 dollars over the amount to qualify for a chapter 7  ) or If I should just le the property go into foreclosure. I think that the property will most likely sell at auction for a negative difference of anywhere from 100-40K
Important things to consider: I do not want to keep the property. I do not have ANY credit card debt or other debt I wish to forgive, I make 3000 over the median amount in my state so I am forced to file a chapter 13.
Will I be responsible to pay back that difference in the auction value amount? If I do not file for bankruptcy what are the tax ramifications of the difference? Please help! |
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savior70
Joined: 25 Mar 2009
Posts: 1422
Location: Florida
168.75 Dollars($)
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| Posted: Wed Apr 22, 2009 6:59 am Post subject: |
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Hi
If you don't want to keep the property, it is better to go for a deed in lieu of foreclosure. This will affect your credit, but in a DIL, the deficient amount is generally forgiven. You are required to pay a tax on the amount forgiven, but you can avail certain exemptions as well. If you're not sure whether you'd be able to make payments under chapter 13 plan, in my opinion a DIL will be a better option for you. |
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