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
Chapter 7 Bankruptcy Attorney
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.
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.thekalrafirm.com