is the balance from the foreclosure be counted as income?
Dec 03, 2009 in
Financial and Loan Tips
jetty
What are the pros and cons of foreclosure?I heard the balance from foreclosure will be considered an income?
What are the pros and cons of foreclosure?I heard the balance from foreclosure will be considered an income?
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One comment
Brian G on December 5, 2009 at 2:16 am
1. No…not always. Before that can happen…your state has to allow for such a thing. Not all states allow for what is called a “deficiency judgment.”
2. The only PRO for foreclosure is that you might get to avoid Bankruptsy. The CONS are pretty evident in terms of damaging your credit worthyness.
3. The only way the deficiency judgment from a foreclosure can be considered income is if the lender 1099s you for the balance. IF you go through a foreclosure, this is something that you can negotiate out. You can ask for a waiver of deficiency judgment or a foregivence of deficiency.
There is also new legislation out called the “Mortgage Debt Relief Act of 2007″ that may or may not benefit you. You can google it and see if it might apply to you.
In the end, you may want to get a good real estate lawyer to assist you through this.
Good luck.