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dylatess
dylatess, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5155
Experience:  37 plus years of experience specializing in bankruptcy law
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I have a second lien on a house in Portland, Oregon. The

Customer Question

I have a second lien on a house in Portland, Oregon. The bank that has the first mortgage has served me with papers stating that they are implementing Foreclosure proceedings on their first lien. The Bank is owed about $800,000. My liens, for remodel repairs
7 years ago are for now, with interest, about $400,000. The house is at best worth 800- 900 thousand dollars. Is there any reason to reply to the subpoena to appear and or to file an answer? My thoughts is that it would be just digging a deeper hole and am
inclined to ignore court subpoena and just write it all off. Any thoughts or suggestions here? There is also an IRS lien, believed to be inferior to mine for some $400,000!!
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  dylatess replied 1 year ago.

I agree that you have no defense and it would not be worth spending money to defend something that you will not prevail in. However, do note that if this house is not your residence, though you may not owe money after the house is foreclosed to the banks, the bank will issue you a 1099 for the amount of money that they lost. And this 1099 is also sent to the IRS. Accordingly, you may owe taxes for the money that the bank lost. Therefore, you should consult with a tax adviser/CPA to learn what may be your tax liability.

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