Posted on: 30th Jan, 2011 09:53 am
I filed bankruptcy in 2008, had a chapter 7 discharge in feb of 2009, I owned two houses at the time that were included in the bankruptcy before any foreclosure actions were taken. I just received a 1099a with a principal outstanding of 176,800 and a fair market value of 119,000, Box 5 is checked yes that I was personally liable for repayment. What does this mean? and what options do I have? Am I liable for the tax on the deficiency? Do I have any recourse against the lender? Thanks So much C
Hi cwebbrn,
You were liable for the deficiency. But as you filed bankruptcy and got it discharged, you were not personally liable for paying off the dues. In that case, the deficient balance was forgiven by the lender. In such a situation, as far as I can understand, you will be liable for paying the taxes on the forgiven debt.
Thanks
You were liable for the deficiency. But as you filed bankruptcy and got it discharged, you were not personally liable for paying off the dues. In that case, the deficient balance was forgiven by the lender. In such a situation, as far as I can understand, you will be liable for paying the taxes on the forgiven debt.
Thanks