Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.
So, to clarify:
You currently have two properties: (1) You moved out of one; (2) live in one; (3) 12 acres of land, 1 acre mortgaged, 11 acres free and clear.
How much money do you and your spouse make?
How many people are in your household?
What advice did the attorney give you that you followed to a "tee?"
yes we have two properties, one that is vacant in possible foreclosure, another that we currently live in on 12 acres. 11 of which is free and clear.
We make approx 130,000.00 per year
4 in our family.
Thank you for the additional information.
You currently make too much money for bankruptcy. Median income for household of 4 in Texas to be eligible for Chapter 7 is $65,477.00. If you were to file for Chapter 13, which is not recommended because of your high income, you have to be on a 5-year plan and you must use all your disposable income to fund a Chapter 13 plan.
If the deed-in-lieu is not going through and the house is ready to foreclose, just let the house foreclose. Most likely, the lender would not come after you for the deficiency after the foreclosure. If the mortgage company does go after you for the deficiency judgment, do not ignore the lawsuit. File an answer to the complaint and ask the Court to determine the fair market value of the foreclosed property. If the Court determines that the fair market value of the property is greater than the foreclosure sale price, then you would be entitled to the difference. See Texas Property Code Section 51.003. You can obtain an answer form from the Clerk's office.
In any event, your 12-cres would be considered your homestead and it would be exempt from seizure. See Texas Property Code Sections 41.001 and 41.002:
What most often happens is that the bank would forgive the deficiency after the foreclosure and issue a 1099-C to you. This debt forgiveness is income that must be reported on your tax return using IRS Form 982. However, in light of the Mortgage Forgiveness Debt Relief Act of 2007 that went into effect on December 2007 the forgiven debt amount will not be treated as taxable event if the forgiven debt was for a primary home. If part of the forgiven debt doesn't qualify for exclusion from income under this provision such as forgiven debt on a second home or an investment property, it may qualify under the "insolvency" exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent. A taxpayer is insolvent when his or her total liabilities exceed his or her total assets.
Kindly note that Mortgage Forgiveness Debt Relief Act of 2007 only applies to debts forgiven in 2007 through 2012.
Mortgage Forgiveness Debt Relief Act:
Forms 982 and 1099-C:
Im sorry it took so long to answer the first time. My internet kicked me off. TO understand about the property, the one acre is homesteaded for tax purpose and the 11 acres is in agg exemption. but the whole 12 acres is considered homestead there fore exempt. So i need not be concerned with the bank getting the land to sell. Also DOnt know if it matters i dont have PMI on the property in question of foreclosure i paid enough down that i didnt have to carry it. Is our retiement and bank accounts safe?
Response: No need for an apology. We all get disappointed by technology more frequently that we can count.
Your retirement accounts are exempt from execution. Funds in bank accounts may be exempt to a certain amount. See Texas Property Code Chapter 42 for complete list of personal property exemptions:
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