I am a Canadian who owns a home in Las Vegas, NV. I have a green card and an SSN but I am not an American citizen. I currently live in Canada where I am working and renting an apartment. My property in Las Vegas is in the foreclosure process and will soon go up for auction. The auction was launched by the HOA. I worked in Vegas in 2009 and filed taxes for that year but have not worked in the USA or filed taxes since then. I have no other assets in the USA.I am not interested in trying to keep the home, the lender can have it. My question is what is my best recourse to 1) minimize or better yet negate any money owing and 2) avoid criminal issue and not being able to enter the USA in the future.SHORT SALE: I am being told to do a short sale but I would not be able to pay the IRS when then 1099 me; I simply have no money. I estimate I would owe the IRS over $30,000 and if I did not pay I was told I could be criminally at fault and maybe even arrested if I ever re-entered the USA.DEED-IN-LIEU: basically, same situation as short sale.WALK-AWAY (FORECLOSURE): Not sure what the implications would be as I live in Canada now and have very few assets here (i.e. car, cash under $10K).What do you recommend I do?Thanks in advance.Jenny
State/Country relating to question: Nevada
Spoken with Canadian lawyer they recommended contacting Nevada lawyer.
As your home is already in the auction process, I am afraid that it is too late to really negotiate a short sale or deed in lieu unless the lender is willing to postpone the auction and you would have to negotiate that with them. If they will not agree to negotiate the short sale or deed in lieu, you let it go to foreclosure and they can if they choose sue you for the deficiency judgment amount, but this means them coming to Canada to get personal jurisdiction over you to enforce any judgment against you. They are not likely to go through that trouble and having a debt in the US or a judgment against you in the US does not bar entry to the US nor is it cause for arrest here.In a short sale they will issue you a 1099, but there are tax credits available to write off any short sale amount for those in foreclosure, so there are very few people who actually end up paying taxes on any amount forgiven in the short sale process or foreclosure process. See: Mortgage Forgiveness Debt Relief Act. If you have no real assets to speak of, likely it is best for you to let the foreclosure proceed unless they would give you the deed in lieu (which is where they forgive any balances). In the unlikely event they seek to pursue you in Canada, you would then be able to seek to qualify for bankruptcy in Canada to seek to extinguish that debt and your other unsecured debts.
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Will I have to worry the rest of my life that they can sue me or will this go away after a period of time? Will a collection agency harass me here? Lastly, can they seek to garnish my wages in Canada? Also just an FYI... the HOA has taken the home off auction for some reason.
Nevada has a 6 year statute of limitations to sue you for breach of contract. It is unlikely they will pursue you into Canada, since the cost to them increases to do so, but in the event they do and if they get a judgment there then they can seek to enforce that judgment in accordance with the Canadian laws (I am a US attorney, so I am not familiar enough with their garnishment process) and you can seek then to file bankruptcy to get the judgment extinguished if you qualify under the Canadian bankruptcy law.
Just need clarification on my question regarding "collection agencies".... Once my property forecloses can I expect to be harrassed by collection agencies or other parties soon after?
Aside: I've read that people in my position most likley have a mortgage that is not even owned by the bank at this point (they sold it off) but more likley by some investor on wall street; I guess this would be the person/institution who might try to sue me.
Collection agencies can indeed pursue you for the debt after the foreclosure. It all depends on the lender and if they sell off the debt or if they do not. Some do not sell them off for a few years after the foreclosure some sell them right away.Some mortgage companies cannot prove they own the note to the property, meaning they cannot legally foreclose if you fight the foreclosure. However, the courts have been accepting substitutes for the note, such as affidavits and trustee deeds and each foreclosure is different as is each court, and it all depends on the court.
Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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