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sherrill423
Guest
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 Posted: Thu Aug 21, 2008 7:12 am Post subject: 2nd mortgage chargeoff |
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I have a 2nd mortgage that is a possible chargeoff. We are getting ready to file Chapter 13 bankruptcy, but have not done it yet, and cannot do it before they may charge off the mortgage. What happens as far as the IRS- I was told it could be reported to the IRS as income when they charge it off. How does that work?
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 cliff
Community Experts
Joined: 05 May 2008
Posts: 328
Location: Houston
75.44 Dollars($)
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| Posted: Thu Aug 21, 2008 8:02 am Post subject: |
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Hello sherrill423,
A charge off is not a forgiven debt. Usually you will be provided with a 1099 showing the amount of the debt as ordinary income that was earned by you, caused by the extinguishment of your debt. So yes, it can be reported to the IRS as income.
Let us know if you still have questions.
Good luck.
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Cliff Pape
Market Analyst
www.home-buddies.com |
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sherrill423
Guest
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| Posted: Thu Aug 21, 2008 8:31 am Post subject: 2nd mortgage chargeoff |
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| If we are making payments to the recovery company--how does that affect the income reported? We should still have to make payments through the court, I'm sure. Does the entire mortgage count as income--the last time I talked to them, they said they have a negative value on the house. We owe more than its worth--How does that affect the income reporting? Or does it? |
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larry
Joined: 27 Jun 2007
Posts: 3328
474.61 Dollars($)
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