Posted on: 25th Jan, 2012 01:49 pm
What if the mortgage is discharged in the BK as the posts above point out, and the mortgage company forecloses to acquire the house, and then sends the borrower a 1099-A form with box 5 checked? They should receive the 1099-A because the mortg. co. acquired the house, but if the debt was discharged in a BK, how can they check box 5 and report that to the IRS as debt that you are responsible for repaying?
Welcome mp,
This is something which you need to clarify with your lender and your bankruptcy attorney. As far as I can understand, the box 5 should not have been checked.
This is something which you need to clarify with your lender and your bankruptcy attorney. As far as I can understand, the box 5 should not have been checked.
Hi mp!
Welcome to forums!
After your debts has been discharged in your bankruptcy filing, then you're not liable for paying the deficient balance to any of your lenders. In such a case, the lender shouldn't have ticked the box 5. Rather they could have sent you 1099c form for the forgiven debt and you may have been liable for paying taxes on that forgiven debt.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
After your debts has been discharged in your bankruptcy filing, then you're not liable for paying the deficient balance to any of your lenders. In such a case, the lender shouldn't have ticked the box 5. Rather they could have sent you 1099c form for the forgiven debt and you may have been liable for paying taxes on that forgiven debt.
Feel free to ask if you've further queries.
Sussane
1099 A is issued to a borrower in case the borrower abandons real property. 1099 C is issued in case the debt of the borrower is forgiven.