Legal Question in Bankruptcy in California

I am interested in getting debt relief The fact that the holder of the first mortgage has filed chapter 13 shows, that this was an owner financed sale, if you have the Chapter correct. It is not likely that this person who apparantly is in financial trouble himself is likely to give you and breaks and seeking to force somene in that stuation to do so would be problematical at best

You may be able to eliminate the second mortgage altogether by filing Chapter 13. This is to your advantage because a loan modificaion involving any write off of principle will result in income tax liability in the amount of foregiven amount, under he debt foregiveness doctrine of the IRS.

However debt that is lien stripped and discharged in a Chapter 13 is not foregiven debt and does not result in any tax consequences.

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