Posted on: 10th Apr, 2012 01:56 am
I had filed bankruptcy and got a discharge. In this process, the home was foreclosed by the lender. The house was sold off for $475,000. On our current credit report, our lender lists our current liability as $430,000. My overall credit report shows my current liability as the $430,000 plus my car loan. How should I handle this? I know that sometimes it's better to leave things on your report, but the foreclosed debt can't be helping my scores.
Hi Coral,
I hope you haven't reaffirmed the mortgage in your bankruptcy filing. In such a situation, you won't be liable for paying the deficient balance resulting from the sale of the property. However, you may have to pay taxes for this forgiven debt to the IRS.
Thanks,
Jerry
I hope you haven't reaffirmed the mortgage in your bankruptcy filing. In such a situation, you won't be liable for paying the deficient balance resulting from the sale of the property. However, you may have to pay taxes for this forgiven debt to the IRS.
Thanks,
Jerry
I agree with Jerry. If you haven't reaffirmed the loan, you won't be liable for paying off the outstanding balance to the lender. However, the foreclosure will remain mentioned in your credit report and you won't be able to remove it. However, with time the affect of the foreclosure will lower down.