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Debt Relief – Insolvency – Bankruptcy Information » Insolvency » form 982 is going to drive me to a mental ward?

form 982 is going to drive me to a mental ward?

im using the form 982 for insolvency on credit card debt settlements.
someone please help me.

im going to give round figures so its easier.

1. the total settled debt is 12000.00

2. i have a mortgage AND equity loan totalling 41000.00 (when getting the equity loan several years ago, the homes appraisal was 42000.00)
3. the original amount of cc debt before settlement was 18000.00

Where do i come up with current home value……….and what do i do with it on the insolvency issue when i still have mortgage loans on the property with no real equity left over?

where do i come up with asset values for my other personal property?

this is going to give me a stomach ulcer.


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3 Responses to "form 982 is going to drive me to a mental ward?"

  1. bostonianinmo says:
    This is the reason that you should consult with a professional for guidance on this. To substantiate insolvency requires a set of financial statements and that is where a pro is worth their weight in gold.

    A simple balance sheet shows the value of your assets on one side and the amount of your liabilities on the other. This is fixed at the point in time when the debt was forgiven. You do need to substantiate the values of your assets and for real estate that generally requires a professional appraisal if the IRS challenges your values. Motor vehicles are easier as you can use Blue Book values. Liabilities are easy, they are what they are based upon current billing statements.

    You are insolvent if your liabilities exceed the value of your assets. And where COD is involved the taxable amount is limited to your insolvency. If you are insolvent by $4,000 with a $6,000 COD then $2,000 of the COD remains taxable.

    One thing to watch out for is not spending more money on appraisals and professional guidance than the potential tax savings. For example if you are looking at a $6,000 COD and are in a 25% tax bracket, the tax would be $1,500. If you have to spend $2,000 on appraisals and professional fees to substantiate your insolvency it would be cheaper to simply pay the tax.

  2. wartz says:
    For your current home value go to and see what comparable homes in your area are being offered for or to for a rough estimate of your home’s value. For motor vehicles, go to and use private party value. For home furnishings and clothing use the garage sale value..
  3. travelguruette says:
    When figuring your insolvency you must use the day prior to the date on the 1099C. Do not use the date of when you file your taxes. Assets include 401k and IRA even though you cant touch them. Do not include the settled debt as a liability because it is already forgiven. You can go to and in the bottom right you can find out what properties have sold in your area in the last year and get their selling costs. Find something comparable to yours and print it out to keep for when you are audited. If you go to a place like H & R Block they do guarantee their work and have audit assistance so you might just want to go there. You still need all the info first. For personal property you can look at the newspaper or craigslist to see what things are selling for (again on date the day prior to notice day)

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