Was the mortgage for that home included in the Bankruptcy?
If so, was the mortgage re-affirmed?
Was the mortgage in your husband's name also?
Whose name(s) were on the 1099-C?
Last question: are you still paying the mortgage?
The lender filed that form so that they could take the tax credit now. They are allowed to file the 1099-C form when a Bankruptcy is filed - they do not have to wait for a mortgage to actually default. This way, they take the tax credit (for the potential loss due to the Bankruptcy), and then going forward they increase their income as you make the payments.
Since the debt reflected on the 1099-C was discharged in your Bankruptcy, the amount is not taxable income for you, but you do have to file form 982 to indicate the debt was discharged in a Bankruptcy.
You do not still owe the money - in the sense that the mortgage company cannot try to collect it from you if you do not pay. But if you do not pay, the mortgage company can foreclose on the mortgage.
In other words, the debt has not been forgiven in the sense that you can stop paying the mortgage and still keep the home.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).