Not paying mortgage??

Question

Hiya.I have bought the house 2 years ago for 150 k.Now its worth 125 k.I cant afford to keep repayments on it,beacuse i have lost my job.If the house is gonna be repossesed and the bank is gonna sell it for 20-30 k less than the mortgage was worth does it mean that im gonna owe them rest of the money?

Answer 1

I suggest you contact a bankruptcy attorney. The first consolation is usually free.

Answer 2

You will owe the difference between the mortgage amount and the amount the bank sells your house for.  For example, if your mortgage is $140,000, and the bank sells your house for $100,000 (after paying all the court costs and fees), then you will owe $40,000 and the bank will get a deficiency judgment against you if you don't pay the $40,000.

If the debt cannot be collected from you, and the bank charges it off, meaning they give up on collecting it from you, they will send a 1099-C form to the IRS.  Then, you will owe taxes on the $40,000 to the IRS.

So, it will be one or the other.  You either pay the bank the amount it is owed after the sale of the house OR you will pay taxes to the IRS for the charged off debt.   It won't be both.

Answer 3

yep plus you will get a 1099 and pay taxes as well