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Company Loan Type APR Est. Pmt.

Second Mortgage in collections

Posted on: 07th Feb, 2010 02:35 am
I was delinquent with my first and second mortgages. The first lender modified the loan, the second sent us to an outside collection agency. I am currently making payments to the collection agency. Are these payments tax deductible as they are attached to my primary residence?
Hi hugrad,

The interest payment on the second mortgage should be tax deductible, if the loan was taken to purchase your primary residence. The second mortgage has been charged off and sold to a collection agency. But it does not relieve you from the liability of paying off the loan. You are still responsible to pay off the second mortgage. Thus, I believe you should have the right to claim tax deduction for the interest paid on the mortgage, even though it has been sold to a collection agency.
Posted on: 08th Feb, 2010 12:09 am
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