top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

1099 ?

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    1099 ?

    I have a friend who was in a CH 13 like me, he converted to a 7 earlier this year. Against my advice, he and his wife signed affirmations on both house and car. Attorney said it would make it easier if they signed them. Make it easier for who?? Car has been repoed and they have left house for foreclosure. Will they get a 1099 on the house and car and do you only get a 1099 if they write off the balance? Can they come after them for a balance if the creditor claims a write off on it and they have to pay taxes for it? Seems like a double standard, but who knows. They should have listedned to me.
    Tags: None
    #2
    Unfortunately, reaffirming a debt 'excludes' the debt(s) from the BK, and therefore the debtor is responsible for any and all deficency balances. In almost all BK cases today, the debtor must state their intentions about secured property/items and they can no longer 'ride through'. Maybe your freind felt they could reaffirm and keep the house and car, but something happened that caused financial hardship. Just curious, did they originally file under the old law?

    As for the 1099, I believe you receive this if the creditor forgives an unpaid debt. It's like a "gift" of money, which must be claimed as income.
    Bankruptcy History:
    Chapter 7 filed - 10/12/2005 - Asset
    Discharged - 02/16/2006
    Case Closed - 11/08/2007

    A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain ~ Mark Twain

    All suggestions are based on personal experience and research and SHOULD NOT be construed as legal advice as I am NOT an attorney. Always consult with competent counsel in your area with regards to your particular situation.

    Comment

      #3
      Depending on the Laws of your State, the mortgage Lender may not be able to seek a deficiency balance for the Loan that was the primary Mortgage. If that's the case, then your friends should prepare themselves to pay some taxes.

      The car loan,.......... More than likely the Lender is gonna seek the deficiency balance. Since your friends have no home to attach lien, they should be watching for a Complaint of a suit to garnish wages and/or their bank accts.
      Filed Ch 7 - 09/06
      Discharged - 12/2006
      Officially Declared No Asset - 03/2007
      Closed - 04/2007

      I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

      Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

      Comment

        #4
        Short answer...No, they will not (should not) get a 1099 on the repo or foreclosure. Odds are, they will be hit with a deficiency balance on the car, which is an unsecured debt, and since they have already filed BK, that is going to follow them around.

        There is nothing wrong with doing reaffirmations agreements, but if this couple couldn't continue to afford the house and car in the first place, he/she has much bigger issues than a reaffirmation.
        Last edited by HHM; 02-07-2007, 09:37 AM.

        Comment

          #5
          They were old law 13 and old law conversion. They should not have reaffirmed anything, but I think that they received crappy advise from the attorney. It is a shame because it looks like filing bankruptcy is not going to help them out at all in the long run.

          Comment

            #6
            irs.gov, look at the bankruptcy publication.

            To clarify use of 1099 and what will determine who gets one.

            Comment

              #7
              Originally posted by SamanthaJones View Post
              To clarify use of 1099 and what will determine who gets one.

              Instead of referencing the publication generally, it would be more helpful if you actually provided the publication number (Publication 908, in case your interested).

              But nothing in that publication changes the answer to this persons questions, no debt has been cancelled (because the couple reaffirmed, deficiency balances are "live" debt), so there should not be any 1099.
              Last edited by HHM; 02-07-2007, 09:54 AM.

              Comment

              Previous template Next

              bottom Ad Widget

              Collapse
              Working...
              X