Posted on: 21st Aug, 2008 07:12 am
i have a 2nd mortgage that is a possible chargeoff. we are getting ready to file chapter 13 bankruptcy, but have not done it yet, and cannot do it before they may charge off the mortgage. what happens as far as the irs- i was told it could be reported to the irs as income when they charge it off. how does that work?
Hello sherrill423,
A charge off is not a forgiven debt. Usually you will be provided with a 1099 showing the amount of the debt as ordinary income that was earned by you, caused by the extinguishment of your debt. So yes, it can be reported to the IRS as income.
Let us know if you still have questions.
Good luck.
A charge off is not a forgiven debt. Usually you will be provided with a 1099 showing the amount of the debt as ordinary income that was earned by you, caused by the extinguishment of your debt. So yes, it can be reported to the IRS as income.
Let us know if you still have questions.
Good luck.
If we are making payments to the recovery company--how does that affect the income reported? We should still have to make payments through the court, I'm sure. Does the entire mortgage count as income--the last time I talked to them, they said they have a negative value on the house. We owe more than its worth--How does that affect the income reporting? Or does it?
Hi sherril.
You question has been answered at http://www.mortgagefit.com/second/chargeoff-chapter13.html
Please take a look at it. Feel free to ask if you have any further questions.
Best of luck,
Larry
You question has been answered at http://www.mortgagefit.com/second/chargeoff-chapter13.html
Please take a look at it. Feel free to ask if you have any further questions.
Best of luck,
Larry