I have received the substitution of trustee and full conveyance original recorded letter from the Reg. office county of LA.

Asked 11 months ago - Glendale, CA

I filed a BK-chapter 7 on 04/2011. The balance of my Home Equity Line Of Credit(HELOC) was included in the BK, and I was discharged from it on 01/2013. Long time ago I have informed by the lender that this account is "charged-off" eff 07/31/2011. Today I received the substitution of trustee and full conveyance original recorded letter from the Reg. office county of LA. I need to know what that's mean to me? If the HELOC is paid off, am I going to receive this year 1099 form as a "profit" Thanks

Attorney answers (3)

  1. Justin Drayton Graham

    Contributor Level 13

    2

    Lawyers agree

    Answered . It appears that the loan was forgiven. If the loan was included in your bankruptcy, you will not have to pay taxes on cancelled debt. There is an exception for bankruptcies under the tax code.

  2. Robert Parkinson Taylor

    Pro

    Contributor Level 12

    Answered . If the loan was forgiven BEFORE you filed your bankruptcy, you might have a "debt forgiveness tax" issue. However, you should have received a 1099 in early 2012 if it was forgiven in 2011. Also, if it was forgiven "pre-filing," you may fall within the insolvency exception (see IRS form 982) or consult a "good" tax professional.

    Good luck!

    Rob

    www.affordableattorneysgroup.com

  3. Madhu Kalra

    Pro

    Contributor Level 14

    Answered . By reason of Full conveyance by HELOC, your loan is paid off, recommend talking to CPA regarding dealing with the issue of 1099 form from creditor . It could very well be exempted from taxation by reason of chapter 7 Bk-Discharge.

    Madhu Kalra Kalra Law Firm 23720 Arlington Avenue, Ste 5 Torrance, Ca 90501 (310) 325-9012 http://www.... more

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