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The mortgage would stay in the LLC name, but the bank will pursue the other two guarantors for the deficiency, if any. In most short sales, the bank will "forgive" the unpaid balance, which will leave the guarantors off the hook. However, all LLC members will be charged with Discharge of Indebtednes Income through the LLC. The Bank will issue a 1099 to the LLC for the forgiven amount and all members will likely be charged with a tax liability unless they have an exception. The two biggest exceptions are bankruptcy and insolvency, which are claimed by filing a Form 982 for the year involved. The fact that the LLC is disolved is a complication, since the 1099 will probably go out to the dissolved LLC. The IRS may go after the members anyway. If the unpaid balance was not forgiven by the bank, then there is no discharge of indebtedness income.
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the bank didnt go after a deficiency but it said they could ar a later time. the 1099 went on;y to my ex and was in his personal name?
could i ask another question related to the community bank that is trying to take my business? I just pulled up my loans and see that my ex is no longer on the home equity one. He is still listed on the business mtg. Both were modified at the same time and refied. He originally guaranteed both. I never saw any release papers. Why would they let him off the hook on the home equity but keep him on the business which is smaller and shouldn't I have been told? Could this be in preparation for when I either can't make the payments or they foreclose so he could take it over?
would he just take over my mtg and regain the property? this adds to my argument they are working with him. they would give my business back to him, leaving me with the 280g home equity loan to pay, letting him off of it as the 1st mtg is in foreclose and the house is upside down by 500g
There will either be a short sale (possibly an inside deal) or there will. be a foreclosure. If there is a foreclosure, there will be a foreclosure sale. That will likely remove the 2nd lien, but coul leave whoever is on the second lien liable. The second lien would then be unsecured, so no longer a lien. They (2nd lienholder) would need a judgement and then seek to lien other property if it is not paid. If the bank with the 1st lien is working with you ex to hurt you, there could be what is known as lender liability. This area of law provides you with a cause of action to sue the bank for working in collusion with your ex. You need proof, and these cases are involved. Will probably involve discovery and can be expensive. If you can get someone to take it on a contingency basis you may be better off. Again, you need proof. Depositions will be taken, so if there is someone at the bank involved, they will be deposed and asked difficult questions. Bankers are notoriously sheepish, so you can get them to fold. The threat of lender liability alone will scare them.
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