Posted on: 19th Dec, 2008 04:08 pm
If I file for bankruptcy, chapter 7, will I get a 1099 from the mortgage company if I include the house?
Hi rcfivestar!
Welcome to forums!
You will only receive a 1099 from a creditor if your debt is forgiven. Any forgiven debt is considered as an income of the borrower. But if someone files for bankruptcy and the debt was included and discharged, it should not be taxed.
However, you should note that if the lender is unable to recover all his debts from the foreclosure sale and forgives the deficient amount, then this forgiven amount can be taken as your income. There are chances that you will have to pay taxes on that amount.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
You will only receive a 1099 from a creditor if your debt is forgiven. Any forgiven debt is considered as an income of the borrower. But if someone files for bankruptcy and the debt was included and discharged, it should not be taxed.
However, you should note that if the lender is unable to recover all his debts from the foreclosure sale and forgives the deficient amount, then this forgiven amount can be taken as your income. There are chances that you will have to pay taxes on that amount.
Feel free to ask if you have further queries.
Sussane