The Florida Bankruptcy Attorney Blog has posted an article that discusses what the Mortgage Debt Forgiveness Act means for you. This article is particularly geared toward Florida homeowners, but still contains a lot of valuable information for homeowners anywhere whose home is worth less than what they owe on it..
The Act states that a homeowner who has had their mortgage forgiven, partially or entirely, cannot be taxed on forgiven portion of the debt, provided its value is less than $1 million if you’re single, or $2 million if married. Without the Act, homeowners still would have been taxed by the IRS and would have been required to pay a percentage of the forgiven debt.
However, the Mortgage Debt Forgiveness Act only applies to your home or place of primary residence. It cannot be applied toward credit card debt, car loans, student loans, vacation home mortgages, or other lines of equity. The Act will become even more useful to homeowners as the number of foreclosures in the country continue to rise and the threat of a double-dip recession looms.
If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.
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