Debt Relief Act of 2007???

[chicagoproud]

My ex partner and I bought a condo in Atlanta, Ga. However, we were forced to move because our jobs were ending and moved to Chicago because of job offers. We tried for two years to sell the property. We finally took it off the market and got approval from our HOA to rent the condo out. This helped us a little with the payments. Our mortgage is over $18,000 and the people renting the unit is paying $1,100. This does not include our HOA fees. We are now 4 months behind. We have been paying some but not the full amount each month. I have spoken to one bankruptcy attorney and he said I should file a chapter 7. However, I'm current on everything else and have had very good credit for a long time. I have no credit card debt. All I have is this mortgage that I no longer can pay and on a condo that I will never return too. I also have a car payment. I have tried to work with Wells Fargo to do a loan modification, we were rejected. The loan is for $254,000 and it's currently on the market for $185,000. It's been on the market for over 100 days and not one person we have yet to find a potential buyer. Now I have requested a deed-in-lieu. I'm told that I should file a chapter 7 bankruptcy otherwise the IRS will come after me and the bank may come after me for the difference. I need serious help and advice as I do not know what my options are. I don't own any other properties and am wondering if my condo is considered an investment property even though we did not buy it for that reason. We have never made any money from the renters. Even though we were forced to move for jobs does this mean that our apartments is considered our "second" home?? I can't seem to find anyone who can tell me if I qualify for the debt relief act of 2007. Can you help me or help me get in contact with someone who can help me?

[StartingOver08]

Is this the only property you own?

Have you been renting in Chicago? It sounds like you have one principal residence (in GA) and you moved in order to obtain a job. Check with a CPA, but it sounds like you would qualify for the 2007 Mortgage Debt Relief. Look here for some information (pg 7) and verify with your tax professional. http://www.irs.gov/pub/irs-pdf/p4681.pdf

Also, the short sale offers are getting much faster since the new regulation went into effect Apr 5 2010. If you have not tried a short sale, then try one. The downfall with a short sale is the lender will want to see all of your financial records including bank statements, retirement accounts etc. You will have to have a valid hardship in order to get the short sale accomplished.

If that will not work for you, then you might let the property foreclose. It will be a big hit on your credit report, no question. This is ultimately a decision only you can make.

[chicagoproud]

Also, the renters send checks directly to
my ex so I have never personally
received any money whatsoever
from them. He is also the primary
person on the loan. I am the secondary.
He has a second home in Texas but
me being the secondary it's my
only home that I own. Does this
make any difference? I feel
that it's better financially for me
to let the house foreclose. If I get
a huge tax bill next year would
the IRS work with me? This
has been a nightmare for me and
all I do is cry. I can't even concentrate
when I'm at work anymore. This
is constantly on my mind.

[StartingOver08]

So your ex and you purchased a home in GA while you were together. He is the primary on the loan and he receives the benefit of the rental.

You just have the liability and 1/2 the 'asset', right? It is worth a phone call to your CPA or other tax professional just for peace of mind. The short answer is yes. The IRS will work with you. But speak to a tax professional/CPA about your specific details. BTW, I would wait until after April 15 to get in touch with him! lol

[BCA2009]

If you owned the home for at least two years and lived in it 2 of the last 5, you qualify to exclude any gains due to foreclosure/short sale/ DIL.

So, if you lived there two of last 5 years don't worry about any tax issues.

[dscurlock]

we used to live in TX, and moved away for another job...so we filed a hardship saying that we moved away, and it would not make sence to keep paying, etc...we contacted a realestate agent that does short sales...they approved the short sale, and wrote off the balance...of course you take a hit on your credit, but we now owe nothing more.

we tried the rent thing also...its not like we did this right away, we had a renter paying less then our monthly payments, and we had to pick up the rest, along with HOA fees, taxes, etc...and renters do not take care of nothing...once they moved out, we were told it would take $6,000 to get the house back up to par to rent again...enough was enough,...and we started the short sale process...I am glad we no longer have the house, and more glad we owe nothing more...but do not talk to just any agent, contact an agent that has exper with short sales...