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Debt Relief – Insolvency – Bankruptcy Information » Insolvency » I have a house in AZ the house was bought for 250,000 but know is worth 120,000. I can no longer afford the ?

I have a house in AZ the house was bought for 250,000 but know is worth 120,000. I can no longer afford the ?

adjusted rate mortagage. If i do a short sale and sell my house for $120,000 will i have have to pay taxes on $130,000 due to the 1099c. Also if i have only have $6,000 of net assetts can i use the insolvency clause

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2 Responses to "I have a house in AZ the house was bought for 250,000 but know is worth 120,000. I can no longer afford the ?"

  1. Real Estate Guy says:
    yes to the 1099 and no to the insolvency clause. WE ARE TALKING ABOUT THE IRS.

    Talk with a lawyer.

  2. financing_loans says:
    Arizona is a non deficiency state. The answer is no unless you have agreed to some note, or its an investment property. Even then they could probably not collect.

    In Utah… Hell yes you owe every penny different. Not in Arizona. Call any attorney and they will tell you Arizona doesnt allow you be be charged a deficiency like some states.

    Thats why rate sheets are different for every state. Arizona is higher risk for lenders to get their money back because of this, so your rates are a bit higher. Point is dont sign anything new the lender wants you to sign… But you should be fine.

    On a short sale you shouldnt have to pay.

    A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure.

    http://www.foreclosurelaw.org/Arizona_Foreclosure_Law.htm

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