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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience:  B.A.; M.B.A.; J.D.
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I am in Texas, My situation is that i had to relocate for another

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I am in Texas, My situation is that i had to relocate for another job. My wife and i bought another home, and have been making payments on the house we moved out of while trying to sell it. In January my savings ran out adn i couldnt make the payments any longer. So i tried a short sale then a deed in lieu. I have recieved notice of foreclosure and they say they are still processing my deed in lieu. I met with a local attorney that gave me advice and I followed it to a tee, He told me when to call him back. I called today with the information he said and he blew me off. So ima concerned that the advice he gave me is wrong. He said i made to much money to file for bankruptcy. the only only thing im behind on is the house and jsut want to get rid of it for lack of better terms. The other concern is i have 12 acres left to me by my parents we tied 1 acre up in the mortage in the new house so the other 11 are free and clear. I need to protect that property.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 3 years ago.

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?"

Customer: replied 3 years ago.

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.

Expert:  Phillips Esq. replied 3 years ago.

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.

 

http://www.justice.gov/ust/eo/bapcpa/20110315/bci_data/median_income_table.htm

 

 

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.

 

http://www.statutes.legis.state.tx.us/Docs/PR/htm/PR.51.htm#51.003

 

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:

 

http://www.statutes.legis.state.tx.us/Docs/PR/htm/PR.41.htm#41.001

 

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:

 

http://www.irs.gov/individuals/article/0,,id=179414,00.html

 

Forms 982 and 1099-C:

 

http://www.irs.gov/newsroom/article/0,,id=205004,00.html

 

 

 

 

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.
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?
Expert:  Phillips Esq. replied 3 years ago.

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:

 

http://www.statutes.legis.state.tx.us/Docs/PR/htm/PR.42.htm#42.001

 

 

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