All Forum Posts by: Michelle Lim

Maybe if I tell you my story, it will help.  

Our house was a small starter home house a mile from a military base (we lived in KY by ft campbell).  A tree fell on our house after we owned it for 6 months and completely destroyed everything BUT the kitchen (which we repainted the cabinets white and got new appliances anyway so it looked fairly updated).  6 months later, we got to move into it again and a year or 2 later, foreclosure since the housing market was bad and we moved to a new state.   It went to sale and ended up bringing in only HALF of what it was worth... actually probably a little less.  They got a DEAL!! New everything, roof, siding, a/c, bathrooms, wood floors, etc. even nice appliances.   So expect the worst and hopefully you will do better than us.

you live and you learn.  

 Thank you.  I googled my little heart out  for hours and couldn't find anything, but when i googled the mortgage debt relief act, it was right there. :) 

I also just found this as well. It seems to answer my question, thank god. It's very nerve wracking to think, us as a household that makes roughly 35,000/year will have to pay back 15,000.

Originally enacted in 2007, the Mortgage Forgiveness Debt Relief Act allows debt forgiveness of up to $2 million to NOT be considered taxable income if:

• The house has been used as the principal place of residence for at least two of the previous five years.
• The debt has been used to buy, build, or make substantial improvements to the home.

On December 18, 2015, President Obama signed a bill that extended the Mortgage Forgiveness Debt Relief Act through December 31, 2016. The extension also retroactively covers mortgage debt cancelled in 2015.

Our house also got sold at Auction in Dec of 2014.  Last year we received a 1099-A (I believe.  The paper just notifying us but nothing to file) and we were told to expect a 1099-c this year.  

any advice?

I have a question about 1099-c on a forclosure. I have heard of the debt relief act and want to see if you think we will qualify to use it. We bought our 1st home when my husband was in the military and we lived there for a few years. He got out of the military and we tried to sell it and financially we couldn't, we'd have to bring too much cash to the table. We rented it out for a year,hoping the market would get better and it didn't. In the process of finding another renter, after 6 months, it was hopeless and it ended up getting forclosed on. Now my question is this... It was our primary home and since it wouldnt sell, right before it foreclosed, we bought another house to live in. Would it qualify for the debt relief act forgiveness? Technically we had another home for about 6 months before it sold at auction.