1099 Questions

[Chandlerman]

I am in the process of filing Chapter 13 in Arizona. My wife and I purchased several properties in Mississippi which were foreclosed on in 2008. After the foreclosures were complete we received 1099s on the properties indicating that the fair market value of the property exceeded the outstanding principal. The totals of the 1099s with a balance in my favor, minus the 1099s in the mortgage companies favor, indicate that the mortgage companies owe me about $65K.

Of course the mortgage companies have not sent me any of this money.

My question is can this amount be used to offset the $140K in second mortgages that I am looking at as unsecured debt?

[JoeBankrupt33]

I'm very confused. If a bank foreclosed on you, they don't owe you any money.

[UpsideDownMI]

The money owed to you minus any exemptions you could place on it, would be applied by equal percentage to all unsecured creditors. If you have not received the funds the trustee would need to action to recover the funds for the unsecured creditors to be paid.

[Chandlerman]

1099 Questions

Thanks for the quick replies.

UpsideDownMI - I understand that the trustee wields a lot of power in this situation, however, shouldn't my attorney be able to start the paperwork on this to help streamline the process?

[UpsideDownMI]

Unless you can use the proceeds to avoid bk, I would not bother paying your attorney extra $ to handle this matter. Just my opinion.