Need Some sound advice

[snook]

I am letting go of an investment condo in florida.....I owe 158,000 it is now worth around 70,000. I stopped making the payments in march....I am trying to short sell, will try for a Deed In Leiu if no sale, and then if the bank says no, will have to go the foreclosure route...I would have to shell out 900-1000 per month to float this condo, chasing good money to bad money....

Question is: If the bank forecloses and issues a defiency judgement against me, would chapter 13 be an option?

Would it wipe out the money I owe to the bank?...

My wife and I currently make a good income (she is not on the mortgage on the investment property), I pay ALL bills on time, b ut just like everything else the costs of maintaining my primary home and expenses are getting tight....When I gave the bank my financials, I pretty much showed a negative cash flow....I have money in my IRA's and substantial equity in my homesteaded primary home....I can afford to pay all my unsecured debts....Its the note that I owe to the bank that I am concerned with....I have not even started to negotiate with bank yet.....I am just trying to get as much information as possible.....Thanks

[HHM]

I would let the chips fall where they may and not worry too much about the deficiency judgment. We have quite a few members from Florida who are reporting that their attorneys are telling them that banks rarely, if ever, pursue the deficiency. Granted, they have the right to pursue it, but what is more likely to happen is the bank will simply write down the debt and issue you a 1099(c) for the difference. If that happens, you will possibly owe income tax on the difference (incidentally, which you would if you did a short sale) unless you qualify as insolvent under IRS rules (you will need IRS form 982).

If you are truly negative cash-flow, you would NOT want to do a chapter 13. A chapter 13 is a payment plan. If at all possible, you would want to do a chapter 7 Bk, if it came to that.