For this reason (and others), we tend to favour variable-rate mortgages as the penalty for early discharge is just 3-months interest.  

Many times borrowers think they are no longer associated with a property because they filed a BK, but in reality they simply discharged their liabilities on the debt. 

If you play your cards right, you'll have a disability rating which will help you be exempt from the funding fee when you buy your house in Missouri when you get discharged, and, by that time, you could sell that house or rent it out to military.

I'm on PACE and have looked at a 'Case Summary' that shows the BK was discharged.

“Drug-related illegal activity” means the illegal manufacture, sale, distribution, purchase, USE, or possession with intent to manufacture, sell distribute, or USE of a controlled substance (as defined in Section 102 or the Controlled Substance Act (21 U.S.C. 8002) or possession of drug paraphernalia.2.Resident, any member of the resident’s household or guest or other person under the resident’s control shall not engage in any act intended to facilitate illegal activity, including drug-related illegal activity, on or near the said premises.3.Resident or members of the household will not permit the dwelling to be used for, or to facilitate illegal activity, including drug-related illegal activity, regardless of whether the individual engaging in such activity is a member of the household.4.Resident or members of the household will not engage in the manufacture, sale or distribution of illegal drugs at any locations, whether on or near the dwelling unit premises, or otherwise.5.Resident, any members of the resident’s household, or a guest or other person under the resident’s control shall not engage in acts of violence, or threats of violence, including but not limited to the unlawful discharge of firearms, prostitution, criminal street gang activity, intimidation, or any other breach of the housing agreement that the other wise jeopardizes the health safety or welfare of the landlord, his agents, or tenants.6.VIOLATION OF THE ABOVE PROVISIONS SHALL BE A MATERIAL VIOLATION OF THE HOUSING AGREEMENT AND GOOD CAUSE FOR TEMINATION OF TENANCY.

But if Interest can't be included in the 1099-C, why is there a Box 3 for Discharged Interest? 

I am in the Army about to be discharged and I have a house in Detroit that I bought from my Mom 20 years ago.  

That's pretty good ROI.And yes, I did get quite skilled at disassembling and reassembling a stack washer/dryer... and removing socks and other unmentionables from the discharge pump.

A sale pursuant to this chapter shall not nullify, eliminate, or reduce the amount of a foreclosure judgment pursuant to Part 14 (commencing with Section 8830) of Division 10 of the Streets and Highways Code.7) Any federal Internal Revenue Service liens that, pursuant to provisions of federal law, are not discharged by the sale, even though the tax collector has provided proper notice to the Internal Revenue Service before that date.8) Unpaid special taxes under the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code) that are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8, or that are being collected through a foreclosure action pursuant to Section 53356.1 of the Government Code.

In general this secure debt is not dischargeable, but even if it extraordinarily was, the lien would stay with the property, not the owner. - as a creditor owning a tax certificate and listed in the creditor list, in a chapter 7 there is very rarely the need to file a proof of claim, and as such no attorney would need to be hired by me in this case.