Legal Question in Bankruptcy in California

I have a mortgage/home in my name (co-buyers) would like to file BK Ch7. I would also like to include it in the bankruptcy so that I am able to start all over and not worry about a thing under my name. I was told that in the Statement of Intensions form if I check the box 'retain' not surrender the property in the bankruptcy that trustee will want to see financials, which we do not have. I was also informed us if we complete a short sale while in BK, Bank of America will file a deficiency judgment on the taxes owed and will send a 1099 my way which cannot be included in the bankruptcy. Which makes me responsible for a lot of money owed and a short sale will still keep me attached to the property.

I know that there is a Mortgage Forgiveness Debt Act of 2007 hat was extended through 2013, wouldn't this some in to play? I also live in California which has their own legislation for anti-deficiency judgements and this was a first home purchase.

Please advise. Thank you


Asked on 1/03/13, 12:29 pm

2 Answers from Attorneys
Scott Jordan Jordan Law Office

You have been told a lot of things, some of which appears wrong. Bankruptcy is not a simple matter of completing forms and requires the skill and expertise of an experienced attorney. You should seek out a local bankruptcy attorney and hire that person. You only have one shot at filing and over 60% of pro se filers make mistakes and have their cased dismissed with very little recourse.

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Answered on 1/03/13, 12:34 pm
Roy Hoffman Law Offices of Roy A. Hoffman

Adding to Mr. Jordan's answer, the Mortgage Debt Forgiveness Act has been extended as part of the "fiscal cliff" legislation passed by Congress so the IRS won't enforce the forgiveness of debt provisions of the tax code. You should still discuss the consequences of foreclosure with a tax professional. As for a deficiency judgment, if you have only a first mortgage and all of the proceeds of the loan were used for the purchase, California law would generally prohibit a deficiency judgment.

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Answered on 1/03/13, 4:09 pm


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