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LawTalk
LawTalk, Attorney
Category: Real Estate Law
Satisfied Customers: 27889
Experience:  I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
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I live in Florida and have a house in Washington state that

Customer Question

I live in Florida and have a house in Washington state that has been in foreclosure for
21/2 years. It appears to have been sold to a junk debt buyer some time ago. It appears i need the help of a lawyer. What kind of attorney do I need and do they need to be
out of Washington state? Thank you!
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  LawTalk replied 1 year ago.
Good morning,

I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today. In order to give you a clear and concise answer, I will need some additional information about the circumstances, please.

1. Has the foreclosure already occurred?
2. What do you need an attorney to help you with specifically?

Doug
Customer: replied 1 year ago.

I'm concerned the junk debt buyers are going to file a lawsuit and


if that happens do I need an attorney? And, no It has not foreclosed


yet which I do not understand why not and should I have and attorney


to help expedite the process? Thank, Scott

Expert:  LawTalk replied 1 year ago.
Good afternoon,

Thank you for the additional information.

Are we talking about a home mortgage, or about a lien based on a HELOC or something like that?

Doug
Customer: replied 1 year ago.

both

Expert:  LawTalk replied 1 year ago.
Good afternoon,

The mortgage lender is not going to sue you unless and until after they have foreclosed on the property.

If the property is underwater and the HELOC lender knows that they cannot get anything through foreclosure---knowing that the first lender gets paid first from any sale proceeds---the HELOC lender might simply abandon the secured interest in the property and look to you based on breach of contract.

Until you are actually sued though it is premature to consider retaining an attorney. They cannot protect you from the claims of the creditors and their attempts to get you to pay.

And given the laws of FL in how they protect you from wage garnishment as well any execution on your home, annuities and retirement income, it is rare that the junk debt collectors take action to sue FL residents. Collecting is just statistically very unlikely, even if a judgment is issued.

If you do need an attorney, you will need to wait to see when and where you are sued, and then you will need an attorney in the same county as the suit is filed in.

But again, for now, there is really nothing that you need to do---as there are no rights to protect at the moment. The threat of a claim and suit is only that---just a possibility, not a certainty.

In the event that you are sued, you may choose to file bankruptcy to avoid the judgment. However, what typically happens after a foreclosure is that the lender writes off the debt and sends you a 1099, which you will claim as income and pay taxes on---maybe. If you can show that you were insolvent at the time of the foreclosure---that your debts, including the house, exceeded your assets, then the IRS will not force you to pay any taxes on the amount that the lender writes off.

If you were not fully insolvent at the time of the foreclosure---as an example you had $10,000 more in assets than in debts, then while the lender may 1099 you for $100,000, you would only have to pay taxes on the amount that you were above the insolvent level----you would pay income taxes on just $10,000.00.

You may reply back to me again, using the Reply to Expert link, if you have additional questions.

I wish you the best in your future,

Doug
LawTalk, Attorney
Category: Real Estate Law
Satisfied Customers: 27889
Experience: I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
LawTalk and 7 other Real Estate Law Specialists are ready to help you
Expert:  LawTalk replied 1 year ago.
It has been my pleasure to assist you and I hope you will ask for me on JustAnswer should a future need ever arise.

If you have any follow-up questions to my answers here, you may come back and ask them in this thread---at no additional charge------and I will be happy to assist you.

Please feel free to bookmark the following link so you can request me to answer any future legal questions you may have:
http://www.justanswer.com/law/expert-lawtalk/

Thanks again.

Doug

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