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Florida Chapter 7 Bankruptcy - I have all paperwork filled

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Florida Chapter 7 Bankruptcy - I have all paperwork filled out (local and national forms) but I need help on whether and how I need to show the short-sale of my home in the filed paperwork. The short-sale took place at the end of May 2009. I owed 200K (on 2 mortgages) and the short-sale closed for 130K. I received a 1099-s from the title company for the 130K and the 1st mortgage bank made me pay $3000 at closing. I was told that the 130K will become income but that I will not have to pay taxes on it because I was insolvent at time of short-sale. The second mortgage bank had me sign an agreement to pay back $8400 @ 100/mo for 7 years. I have already placed this $8400 in the Schedule F. Do I need to state the details of the short-sale on the bankruptcy filing? If so, what amounts do I need to show and on what forms? Thanks for your help!
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 5 years ago.
Do I need to state the details of the short-sale on the bankruptcy filing? If so, what amounts do I need to show and on what forms?

Response: Yes. You need to show the amount of the sale and what you received. Since this is a short-sale, you did not receive anything. See Statement of Affairs Item #10a. It is self-explanatory what you need to fill out.

On Statement of Affairs Item #10a, you will list the details of the Short-sale.

The shortage on the first loan should be listed in Schedule F, just like you did with the second 10a. That is the amount that you are still owing on the first loan.
Customer: replied 5 years ago.
Ok, I understand the part about listing the details on Statement of Affairs Item #10a.

But I'm confused about listing the "shortage on the first loan should be listed in Schedule F" . I do not currently owe the first mortgage bank any money. I did get a 1099-s form showing gross proceeds of $130K but I received no cash. Are you saying that I need to list this 130K in schedule F ?

Expert:  Phillips Esq. replied 5 years ago.
A short-sale implies that the property is being sold for less than the mortgage on the property.

What is the amount of the mortgage on your first mortgage?

If the sale completely took care of the first mortgage--actually paid off the first mortgage, then you do not need to list anything on Schedule F for first mortgage. If not, you need to list the difference between the first mortgage and the amount that the first mortgage lender received on your Schedule F.
Customer: replied 5 years ago.
Let me try to explain in more details:

Before the short-sale, I owed the first mortgage bank $186,000 and the second mortgage bank $48,000.

The property was sold for $130,000.
The HUD shows Payoff to 1st mortgage loan = $117,000 and payoff to 2nd mortgage loan = $3,000. The rest of teh 130K went to closing costs.

I listed $8400 to 2nd mortagage on Schedule F as a result of the payback agreement I signed with 2nd mortgage bank. But the 1st mortgage bank agreed to accept $117,000 as full payment for the $186,000 owed to them.




Expert:  Phillips Esq. replied 5 years ago.
On Schedule F, you will list the first mortgage: $69,000.00 ($186,000.00-$117,000.00).
This is the actual amount you would have owed without the agreement.

On Schedule F, you will list the second mortgage: $45,000.00 ($48,000.00-$3,000.00).
This is the actual amount that you would have owed without the agreement.
Customer: replied 5 years ago.
I trully appreciate all your answers so far and your help. With all due respect I just have a doubt about what you're telling me because schedule F says on the instructions to list "unsecured claims" "as of the filing of the petition". I already got rid of the property and only have a signed agreement to pay teh 2nd mortgage $8600. So how come I have to list $69,000 and $45,000 also as debts? I do not want the Court to think I am trying to list debts that I do not have. Please explain the reasoning for this. Thanks in advance.

Expert:  Phillips Esq. replied 5 years ago.
I will now opt out and let another expert assist you.
Expert:  FiveStarLaw replied 5 years ago.
Hello,

If you received a release on the indebtedness with the exception of the 8600 on the second mortgage, your reasoning is correct. You would only list 8600 as unsecured. However, even with a release, in an abundance of caution, I would still list the first mortgage as a contingent debt of $100 to discharge any potential claims the first mortgagee may have.

If you did not receive a release on the indebtedness with the exception of the 8600 on the second mortgage, you will want to list the entire loan amount.

BotXXXXX XXXXXne is that it is more important to list the creditor so that the creditor receives notice of the filing than it is to list the correct amount.
Customer: replied 5 years ago.
Ok FLAandNYLawyer , that makes a lot of sense to me to list the 1st mortgagor just in case they try to file a claim later. So you suggest to put $100 in the amount of Claim for the 1st mortgagor and place an X in the Contingent column?
Expert:  FiveStarLaw replied 5 years ago.
Correct
FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36629
Experience: Bankruptcy Lawyer. Experienced.
FiveStarLaw and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
Thank you so much. I greatly appreciate it and will "accept" your answer now!
Expert:  FiveStarLaw replied 5 years ago.
Thank you. Please ask for me directly if you need additional assistance.

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