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I am a single male that bought a 3 bedroom home (1140 sq feet)

Customer Question
in Casa Grande, AZ (40...
I am a single male that bought a 3 bedroom home (1140 sq feet) in Casa Grande, AZ (40 miles SE of Phoenix) during the housing boom of 2005 (Sept 2005) for $142,000. I currently owe $127,000. The market value is now around $80,000. I am getting married in October 2009 to a lady who has a younger son (we need more room). It is better for us to move closer to Phoenix because of job sites, family, friends, etc.. We will have a dual income which increases our buying power by more than $100,000 versus what I had when I bought the house in 2005. She, most likely, can afford a house on her own. Is it better for her to buy the house we want for the next ten years, on her own, and short sale my current home, under my name?; or is better for her to buy our next home in her name, and I declare bankruptcy? If I declare bankruptcy, is better that I do it before we get married (does a bankruptcy post marriage automatically tie her in), or can I do it after? Approx how long does a bk take?
Submitted: 8 years ago.Category: Bankruptcy Law
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8/5/2009
Bankruptcy Lawyer: WALLSTREETESQ, Attorney replied 8 years ago
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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DO NOT GET MARRIED BEFORE FILING A POSSIBLE BANKRUPTCY AND OR A SHORT SALE. A SHORT SALE COULD TAKE A LONG TIME, AND THE BANK (UNLESS THE WAIVE) CAN STILL COME AFTER YOU FOR THE REMAINING AMOUNT DUE.

IF YOU FILE A BANKRUPTCY, YOUR DEBTS WOULD BE TAKEN CARE OF AND WOULD TAKE LESS THAN 2-3 MONTHS TO COMPLETE. MUST BE DONE BEFORE MARRIAGE, AS THE COURT WILL TAKE HER INCOME INTO CONSIDERATION.

IF SHE PLANS ON BUYING A HOME WITH HER OWN CREDIT SHE SHOULD DO IT BEFORE THE MARRIAGE ALSO, HOWEVER BE AWARE IF BOUGHT BEFORE THE MARRIAGE, IN TERMS OF A POSSIBLE DIVORCE IT MAY NOT BE CONSIDERED MARITAL PROPERTY.
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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Bankruptcy Lawyer: WALLSTREETESQ, Attorney replied 8 years ago
In regards XXXXX XXXXX TAX complications, the IRS tax code specifies that a borrower must file a 1099C Cancellation of Debt form when the forgiven amount equals or exceeds $600, the IRS has treated this amount as fully taxable income on the part of the borrower.

Only a personal bankruptcy filing could prevent the forgiven debt from being treated as taxable income. The Debt Relief Act effectively provides an amendment to the original 1986 Internal Revenue Code which allows selective exclusion of forgiven debt from taxable gross income.

Under the conditions of Form 1099-C, there are special circumstances that may affect whether canceled debt is treated as taxable income. In cases where the borrower declares bankruptcy, the debts are fully discharged although the declaration may have broader adverse effects in terms of other financial and tax obligations.
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WALLSTREETESQ
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Category: Bankruptcy Law
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Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS

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