Mortgage compaines seeking difficient balances?

[daisey]

How often do you think this happens in a chapter 13 bankruptcy? I am just curious to kinda see where we may sit.

[SamanthaJones]

In 13 there are no deficiencies-

On the house(s) you want to keep you have to pay all past due amounts, and continue to make all payments when they are due. Unless you speak of a property that you are going to surrender- in that case the states have different laws about deficiency judgments- soem allow them, some don't. The spooky side of a deficiency is the possibly tax consequence- even if the lender were to forgive the deficiency, for eaxample a short sale- you may still have to pay income tax on the deficiency amount.

[bige1030]

If the deficiency is discharged in bankruptcy, though, there is no income tax on it. That amount could reduce certain tax attributes, though, of either the estate or the debtor.

[HHM]

It depends on your state law...most states do not allow mortgage companies to seek deficiency balances.

[daisey]

It would eithor be Indiana or Tennessee - House is in Indiana we are living in Tennessee and have been for a year. I can't seem to find any concrete answers on these deficiency issues. We have a first and a second on the place and our lawyer says that the second is not worth the paper they write it on. That we are only going to have a problem with our proposal if the 2 companies seek a judgement for the balance after the house sells. I figure the second is gonna deffinetly seek one since they arent gonna get squat!

I am so sick over this whole mess, I cannot wait for it to be over and for life to go on, I know it will but in the mean time I am near breaking point. I appreciate all the help and support I have been able to fine here.