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Debt Relief – Insolvency – Bankruptcy Information » Insolvency » I have foreclosed on a house. Will be getting a 1099-c. Is is better to prove insolvency or do bankruptcy?

I have foreclosed on a house. Will be getting a 1099-c. Is is better to prove insolvency or do bankruptcy?

I am also divorced at the time of the foreclosure. Will I also be responsible for the full amount of the 1099-c, or will it be split with the ex-spouse? We were divorced before the sheriff’s sale.

My house was foreclosed on 1-3-2008. The house was refinanced in 2006 and is a first mortgage only.
This is my primary residence. Sheriff’s sale was on 1-3-2008. House was refinanced in 2006 and is a first mortgage only.

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One Response to "I have foreclosed on a house. Will be getting a 1099-c. Is is better to prove insolvency or do bankruptcy?"

  1. v b says:
    When was the house foreclosed on?
    Was this your primary residence?
    Was the loan the original loan or a refinance that was NOT used for a purpose other remodeling?

    The reason I ask is that Bush signed a Mortgage Foregiveness Relief Act on 12/20/2007.

    If this was your primary residence, foreclosed on or after 1/1/2007, the loan was less than $1M and the loan proceeds were used entirely to buy, build or improve the property, you got a Christmas present. You may elect to subtract the debt from the basis of your property or do form 982.

    If you don’t qualify for the above, the 1099-C officially belongs to both of you due to the fact both names were on the loan. The IRS expects the money to be reports on somebody’s tax return. You can report all of it or half of it, if your husband reports the other half.

    If you have to do form 982, whether the debt was discharged in bankruptcy is a matter of law. Insolvency is available to everybody else.

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