We are in MO. We are having to file Chapter 13 Bankruptcy
With our house, we are a little underwater. We have determined to not keep the house. We are currently behind on our payments, and do not plan to make any more.* Original 2007 loan $123K
* Current balance around $99K
* Current Market Value around $90KWe have been offered:
1) Deed in lieu - 45 days to be out. $6200 given to us
by mortgagee at the end of the Deed in lieu.
2) Short Sale - We have to have it listed with a realtor within 15 days, and have it listed until it sales
, with the mortgagee dictating the price. We can stay in the house until it sales. Upon completion of the Short Sale, the mortgagee will given us $7100.
3) We could also just keep it until they foreclose on it.Our bankruptcy attorney told us that there might be tax
implications with the deed in lieu and/or short sale. He recommend that we speak with a tax professional to determine the best route.In online searching, we noted the Mortgage Forgiveness Debt Relief Act. It appears that short sales (at least through the end of 2016) are available for this act.Therefore, with tax implications for any loan forgiveness amount (i.e. receiving a 1099-c or similar) what is the best option for us as we go through the Chapter 13 process (i.e. deed in lieu, short sale, or allow them to foreclose?)