Okay, so I am not experienceing Foreclosure, but I have a friend whom I think is dealing with it.
Bottomline, he got himself in waaaayyy over his head. He bought a really big house, with nothing to put down, built a pool within the first year, and even put two vehicles under his mortgage (Stupidist thing I have ever heard of, as he will be paying for those vehicles probably 15 or 20 years after he doesnt have them anymore)
So, my question is, IF he experience Foreclosure (Not sure how he couldnt have, and he is now renting a different house) what happens? And especially, what happens to his vehicles?
I know some of you in here really get this stuff, I dont
Thanks in advance, az
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The vehicles should be free and clear since most likely he either refinanced or took out a 2nd to pay for them. The house was/will be sold at auction probably at a substantially lower amount than he owes. The bank could then file a deficiency judgment for the difference against him. It depends on the bank. Some banks do, some banks don't.
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Very very sorry to hear that Miss Mary.
Theres no doubt that times are really tough. More and more I keep hearing about things just like this. :pity:Fin Fan In Cali and njfinfan like this. -
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If you were near me, you guys would be welcome to stay with me.
I wish there were something I could do to help. Know that my prayers are with you, Chris and the girls.
Luv,
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luv
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As for foreclosures even in bankruptcy they cannot come after it but the IRS can, they have the option to claim the difference ($100,000) as unrealized income for your 2008 filings. Bankruptcy does not remove you from the IRS long and clammy reach. I imagine you filed Chapter 7? Now I heard a rumour that the new bailout removed this from the IRS' purview but I have yet to confirm that. Please check with your accountant re this.
Even after the Bankruptcy Abuse Prevention and Consumer protection Act in 2005, and depending on the state you live, if you file Ch 7, your house (up to a certain level (state or federal rules)), your car, your ERISA plans (401(k) or 403(b) etc) and IRAs are protected from creditors. Unfortunately IRAs aren't always safe from the IRS even in Ch 7. However you still need to pay for your house and car to avoid losing them, as it is very difficult near to impossible to remove that debt (home) from the creditors. This is a year you need a good accountant Mary, one who specializes in Bankruptcies and Foreclosures. Let me know if you need help finding one.Celtkin, azfinfanmang, Fin Fan In Cali and 1 other person like this. -
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Ok, I looked in a bit further and the debt forgiveness was signed in to relieve from income any debt forgiveness (unrealized income) for the principal residence from Jan 1 2007 through Dec 2009. The caveats, the forgiveness only applies to the principal residence, and not any refinancing to pay Credit cards or to acquire cars etc. Also you do not get this release from the unrealized income if you filed bankruptcy.
GovTrack: H.R. 3648: Text of Legislation, Enrolled Billazfinfanmang likes this. -
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Mary, I have a good friend that is a CPA and does work within this field, I will give him a call this week to see what he knows.
From what I have found is that the bankruptcy exception for the forgiveness is Ch 11, if you file Ch 7 then you are considered insolvent and shoul qualify for the forgivness. So it looks like you should be ok, but really you need to contact a Tax accountant as they will know more about this than anyone else.azfinfanmang, njfinfan and Fin Fan In Cali like this. -
Sorry to hear that Mary. Prayers, thoughts and best wishes for the future.:wink2: Sorry to hear about your friend as well Brother. This holiday season is going to be a real rough one for a lot of us.
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Girl, please try not to worry yourself into getting sick again.
I know it's hard, but worrying won't help or change anything. Believe me I know, I'm a worrier.
Take care of yourself. Your health is more important than anything.azfinfanmang and njfinfan like this. -
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I am a strong believer that good things happen to good people, and of course this is testemont Mary as to why somebody is helping you and your's in this way.
As soon as you mentioned your foreclosure, I thought of 2 things (Three really), your health and your daughters.
Sounds as things are gonna be tough for you, dont forget your internal support here. You know that this entire site is behind you and nothing but positive thoughts are coming your way.....
Santa does work in peculiar ways my dear...very very peculiar ways.....:shifty:
God bless you, and you know I am ALWAYS here for you.:bighug:dolphindebby, njfinfan and Fin Fan In Cali like this. -
So what your saying Paul is that he will still be on the hook for the Cars (Probably through a refinance) and probably a portion of the house (Whatever auction doesnt bring)?
As I said, this friend was, and always has lived well beyond his means. The mentality of "IF the bank will keep lending it, I must deserve it", holds true for him. :pity:
Also, when he told me he financed two vehicles under his mortgage made ZERO sense to me personally, as he will be paying on the principal for 30 years. BTW: It's not like he just went out and bought cars, he was easily in for 70,000 for the two vehicles.njfinfan likes this. -
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We love you all. :kiss:azfinfanmang and Fin Fan In Cali like this. -
I'm here 100% Mary.
We love you.azfinfanmang and njfinfan like this. -
I've been really sick the last couple of days but after reading what Mary is going through it seems like small potatoes. Sometimes you need a different reference point. I hope things start looking up soon Mary.:up:
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examples:
Assume Sharon’s principal residence is secured by an indebtedness of $800,000 of which $800,000 is qualified principal residence indebtedness. If the residence is sold for $700,000 and $100,000 of the debt is discharged, then the $100,000 of the amount discharged will be excluded from Sharon’s gross income under this provision.
Assume Sharon’s principal residence is secured by an indebtedness of $1
million, of which $800,000 is qualified principal residence indebtedness. If the residence is sold for $700,000 and $300,000 of the debt is discharged by the bank, then only $100,000 of the amount discharged may be excluded from Sharon’s gross income under this provision.
So it all depends on where the values lie, a friend aqnd client of mine was just hit with an $84,000 IRS bill in a case similar to this.azfinfanmang likes this. -
Yeah, I was thinking that perhaps the most important fact involved is the Equity or perhaps "In-Equity" involved.
So, if he actually makes money on the auction, he will be taxed on that amount alone.
But once again, how do the vehicles come into play. Almost by default he will automatically have negative or "In-equity" (Not sure if that is the right or even a word at all) derived directly from the vehicles..right? That would mean that he would have to make a killing off of the auction to actually NOT have to pay additional taxes on the vehicles. right? -
The way I look at it Mary, as long as we have our loved ones, and our health, that's all that really matters the most in life.:hi5:
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vt_dolfan Season Ticket Holder Club Member
Mary....
You probably have never read a response from me directed at you in the past...so I might be a distant "phins.com"...
But this song uplifts me......reminds me were all gonna get our shot.....
[ame]http://www.youtube.com/watch?v=UuYTpCyJYyQ[/ame]
With the family and friends you have...always remember you are lucky to have the single most precious thing....Love.
Im pulling for you guys.azfinfanmang and njfinfan like this. -
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I forgot your hubby was a fellow panhead, I knew there was a reason I liked you so much :) Days like these my dear, we have to follow the Honorable Robert Nester Marley and sing
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Panhead, I don't know the etymology of it, just one of those words I have always used. It used to be my e-mail name until people kept on thinking I was a Harley Rider lol!
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If you come online today and see this, I need for you to either PM me or email me at mary@godolphins.us, if you would. We received in the mail yesterday a "Notice of Assets and Deadline to File Proof of Claim" and I don't know what that means and I'm a little concerned. I'll further explain when you email or PM.
Thanks so much.
Mary -
Cheers
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