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Hi, my name is Mark. I will be happy to help you with your question. You mentioned that there was a $15,000 deficiency on the second loan and that DCU cannot pursue you. DCU will send you a 1099-C for the cancellation of debt. There are two types of debt recourse (personably liable) and non-recourse (not personally liable). If you are not personably liable for the debt this would not be considered income.
Was the sale relating to your personal residence? Yes, you are correct that this would be reported to the credit bureau agencies.
Ok whether you are personally liable or not for the debt, you would still qualify for the cancellation of debt from your principal residence exclusion. This would be reported on form 982.
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