Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
1) How much equity - if any - does the house have?
2) Are you currently insolvent? (Insolvent means your total debts - including the mortgages on your real estate - exceed the total value of your assets - including the market values of your real estate.)
3) If insolvent, what is the difference between your total debts and total assets?
1) Given the information you provided, if you allow the 2 condos to foreclose, you would be able to keep the house, because it has less than $75,000 equity. This is per California Civ. Code 704.730, which can be viewed here:
2) If you are issued a 1099-C (Cancellation of Debt) for either foreclosed condo, you would not have to pay income tax on the cancelled debt that is less than the amount by which you are insolvent. In other words, if the cancelled debt totaled less than $358K, you would not have to pay tax on that amount. Here is the information about the income tax liability for debt forgiveness:
I think this is what you wanted to know. If not, please let me know.Thank you!