Does Chapter 7 Bankruptcy protects one from the shortage when the foreclosed house is sold?

Question

Also, will they also get hit with a penalty from the IRS if the mortgage company indicates a loss to the IRS? Need a debate settled in In Michigan.

Answer 1

You need to contact a good bankruptcy attorney in your area. Most will see you on a free first consultation. They will want to look at your last 6 months of pay stubs, list of all your debt, taxes for the last 4 years and your assets. If the home has gone into the foreclosure and there is a deficiency balance after the foreclosure, they would include it in the bankruptcy so you would have that debt discharged as well. You don't give much information, so hard to help, but...a qualified attorney will be able to tell you what you qualify for and what you would need to do so. Good Luck!