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 irizarrymarilyn
Joined: 27 Oct 2007
Posts: 7
4.59 Dollars($)
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 Posted: Fri Feb 29, 2008 8:09 pm Post subject: bankrupcy and short sales |
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| Hi, I am confused, I have several properties in pre foreclosure and I have offers on a couple of them for short sales. i will probably be filing a chapter 7. If I do short sales and file bnkrupcy after, will any defecienciy judgements or tax consequence (1099) be done away or will I still be liable. Is it better to just file bankrupcy before any short sales or actual foreclosures . We have an LLC business which is doing poorly, but has 2 vehicles, because it is a tour company. Are these vehicles safe?How about our own personal vehicles that are paid for? And lastly I have some land in my name that really belongs to my ill sister for whom I am her conservator, is there any way of protecting this land for her in a bankrupcy?? I am heartsick to loose all she has just because it's in my name. Sorry for so many questions. Thanks |
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jameshogg
Joined: 20 Dec 2005
Posts: 1003
Location: nevada
125.64 Dollars($)
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| Posted: Fri Feb 29, 2008 9:34 pm Post subject: RE" short sale or bankruptcy? |
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Hi Irizarrymarilyn,
Welcome to forums.
Please don't think that you'll lose all.
The fact that you had bought several properties makes me think that they might be for investment purposes. Is that so? Going for a short and then filing bankruptcy makes sense.
If you go for a short sale, there will probably be a deficiency judgment filed by the lender and in case you can't pay it, he might cancel the debt. But this doesn't mean you'll have to pay federal tax on the canceled debt.
You may be exempted from paying the federal income tax on canceled debt as per the law of Mortgage Debt Forgiveness Tax Relief Act . However, depending upon where you stay, you may have to pay state income tax on canceled debt.
Regarding what you should do, I feel, if you have too much of debts and cannot afford to pay any, then file chapter 7 bankruptcy. It will affect your credit no doubt, but you can wipe out all debts and start afresh. At the same time, you need to find out whether your home will be considered as an asset to be liquidated to pay off your debts.
Talk to a bankruptcy attorney in this regard.
Thanks |
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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1490
Location: MASSACHUSETTS
128.70 Dollars($)
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| Posted: Sat Mar 01, 2008 3:48 am Post subject: RE: bankruptcy, preforeclosure or short sale |
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Hi Irizarrymarilyn,
How many properties are there in pre-foreclosure? if there are 2-3 agreed for short sale, you can go for such an option. But for the other properties, you can just go for an usual sale. Or else, you may think of filing Chapter 13 bankruptcy and paying off the debts on properties other than the ones on short sale. But this depends on how many properties you have and the total amount of debt.
Refer to a previous discussion on Do Short Sale or file Chapter 13 bankruptcy to know more on this issue.
Hope this helps...
God bless you.
Samantha
_________________
Know how to compare lenders with mortgage booklet |
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larry
Joined: 27 Jun 2007
Posts: 3328
473.40 Dollars($)
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| Posted: Sat Mar 01, 2008 3:19 pm Post subject: |
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Hi Irizarrymarilyn,
Seems James and Samantha has given you some sound info.
You can think about filing chapter 7 but for that you will have to qualify.
Best of luck,
Larry |
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