Legal Question in Bankruptcy in California

Recieved a 1099a for discharged mortgage

I recieved a chpt 7 discharge in 2007 included in it was a mortgage. We surrendered the house and did not reaffirm, the house was foreclosed in Dec 2007 after our discharge. I just recieved a 1099a from WAMU for the amount of the mortgage and box 5 is checked YES for ''was borrower personally responsible''. What do I do?

I also moved out of state from CA to TX after the discharge so where would I seek legal help?


Asked on 2/02/09, 4:26 pm

1 Answer from Attorneys
Larry L. Doan Law Office of Larry L. Doan

Re: Recieved a 1099a for discharged mortgage

In California, the borrower is not normally personally responsible on a first mortgage when there is a deficiency after the foreclosure, i.e. the sale doesn't bring in enough proceeds to pay off the loan on the mortgage. However, if you surrendered the house in bankruptcy, I suppose that is like doing a deed in lieu of foreclosure, and WaMu might have considered that a forgiveness of debt, which is taxable, hence it generated the 1099a for you. Also, you probably were too late to qualify for the Debt-Forgiveness Act of 2007. I would check with a bankruptcy attorney in Texas for further advice.

Larry L. Doan, Esq.

Note: The above response is provided for information only and should not be construed as legal advice, nor to create an attorney-client relationship, which can only be established through payment of consideration.

Read more
Answered on 2/02/09, 7:39 pm


Related Questions & Answers

More Bankruptcy Law questions and answers in California