If I opt to allow my home to go into foreclosure how long before the mortgage co. files with the IRS ?

Asked almost 2 years ago - Orange City, FL

I owe 115,000, home value approx. 45,000. If not 'forgiven' I will owe taxes on difference. There are MANY empty houses in my area. Was told on here I may owe approx. 14,000 from the 1099 that will be filed by Hayward mortgage. Any idea how long I will have to come up with monies? Don't want state retirement/SS attached. I am 71, don't care about my credit anymore. Do I have to continue paying insurance on this house or do I stop when I stop paying mortgage payments? Hayward paid taxes. Can't afford 8.5% mortgage and was refused modification by Chase (Hayward bought my mortgage about 3 months ago) Now with an escrow of approx. 2,700 - payments went from 922 to1,052) feel 'walking away' is my best/only option..any help appreciated ...

Attorney answers (4)

  1. Harrison Wesley Poole

    Contributor Level 9

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    Answered . You should at least consult with an attorney that practices in this area so that you can be fully advised on all of your options and the ramifications of each. It may cost you a few hundred dollars in a consultation fee, but it is money well spent to know about all of your options. Generally speaking, if the home is/was your principle residence, the cancellation of debt by the bank is not taxable as income.

    Every situation is different and no one should rely solely on information received from the internet. If you have... more
  2. Jeffrey Alan Klein

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    Answered . You should speak with an experienced foreclosure defense attorney in your area, he or she should be able to discuss all options with you. Our office is in Daytona Beach, We would be happy to provide a free consultation.

  3. Diane L Drain

    Pro

    Contributor Level 15

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    Answered . It is best for you to talk to a competent tax attorney or CPA in order to determine your tax liability. They wil also be able to advise you about the process of making payments, if any are due.

    My best to you.

    This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the... more
  4. Daniel Lee O'Neil

    Contributor Level 18

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    Answered . As Diane suggested, it would be improper for anyone on Avvo (experienced tax attorney or not) to offer what amounts to legal advice with respect to your situation without a signed engagement letter. I can't speak for Orange City, Florida but Houston has numerous volunteer attorneys that would be climbing over each other to sit down and speak with you at no charge to discuss your options and rights moving forward, based on the specific facts, out of respect for your financial troubles and difficult issues. I would urge you to look for a volunteer attorney program, an elder law legal clinic at the nearest law school to you, or the closest Low Income Taxpayer Clinic (LITC) near you. Florida has a lot of attorneys, wherever you find attorneys you can find at least one that wants to serve the public interest with some pro bono assistance. Best of luck

    There is NO attorney-client privilege based on this interaction. I am NOT your attorney. Further, everything we... more

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