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Forgiven/cancelled debt & how it could affect my HUD apartment, wants to file Ch 7

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    Question Forgiven/cancelled debt & how it could affect my HUD apartment, wants to file Ch 7

    I haven't had to file bankruptcy since the early 90's - I think it was in 1992 and it was a Ch 7 case - but am thinking about doing so again for a number of reasons.

    I have a bunch of bills I haven't been able to pay. I have two judgments under my belt too - one was given to me in 2003 not long before I went out on Federal employee disability and SSDI. It was partially satisfied because they seized my bank account. The other one dates back to 2018 and it my memory is correct, that particular debt was eventually sold to someone else.

    In 2004, about a year after I left the Federal government, I had to give up my lease car because I couldn't afford the payments. I did a voluntary repo and towards the end of that year or early the next, I received a 1099-C and was forced to report this as income to the IRS. Given that my debt load is huge once again I am concerned this could happen to me again and maybe affect my rent as I'm in a HUD apartment.

    I tried to get legal aid to help me file Ch 7 bankruptcy but was refused because my income is execution-proof. What if I get another 1099-C or several of them? Would HUD count this an either income or an asset? If so, it would affect my rent and I can't afford an increase. I am barely getting by now.

    I found an excerpt in a HUD booklet online re. how they calculate rent and what is considered assets and income but didn't find any clear cut answers. One excerpt said that an asset that is disposed of through a bankruptcy, foreclosure, etc is not counted by HUD. In another excerpt HUD doesn't consider temporary or non-recurring payments as income. So I'm not clear about where this puts me.

    Another issue that is complicating my situation even more is that I have very little health insurance. All I have is Medicare A, which covers hospitalization only. I've had serious issues come up during the past year and one bill that is really big because of them is an ambulance ride I had to take last December. That bill is around $3,000. I can't afford to pay it at all.

    What should I do if I get another 1099-c? I can't afford to pay taxes and can't afford a huge rent increase and am worried I might even lose this apartment. I've got nowhere else to go.

    If I was to file bankruptcy, it would be way different than it was in the early 90's. They made it much harder from what I heard.

    Please help. Thank you.

    #2
    I filed chapter 7. In 2015. The debt that was discharged was never reported as income. It was simply discharged. Perhaps someone with more experience can chime in…but, I doubt you would have a tax burden as the result of chapter 7.

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