Oakland Attorney Providing Advice on Short Sales
By common definition, a short sale involves the sale of a home for less than the original mortgage amount. A mortgage lender is typically motivated to consent to a short sale because it is unlikely to collect additional funds from a struggling debtor and the process saves them considerable foreclosure fees. A debtor, on the other hand, is typically motivated to consent to a short sale because it is less expensive than foreclosure and preserves their credit history.
While a short sale may sound like an enticing option for people who are struggling with debt and facing foreclosure, there are certain tax implications and other financial consequences that must be carefully considered.
At the Law Office of Lawrence L. Szabo, we have advised many clients on legal matters related to the short sale of a home. We provide the dedicated legal assistance you need during difficult financial times. Contact us for a free initial consultation.
Mortgage Debt Relief Act
In 2007, Congress passed the Mortgage Forgiveness Debt Relief Act. According to the IRS, this law allows debtors to "exclude income from the discharge of debt on their principal residence." In other words, if a debt is cancelled, such as in a short sale, the borrower does not need to report it as income on their federal taxes. Please note, this option is not available for second/vacation homes, rental property or business property.
Preventing Foreclosure and a Short Sale in California
If you want to avoid the short sale of your home, Chapter 13 bankruptcy may be the answer. Chapter 13 bankruptcy immediately stops all foreclosure actions on your home. It also reorganizes yours debt and assets, enabling you to make back and future mortgage payments.
An Experienced Bankruptcy Lawyer
Understanding the financial implications of a short sale often requires the assistance of a lawyer with significant experience handling complex bankruptcy and debt relief matters. Attorney Lawrence L. Szabo has more than 35 years of experience in bankruptcy law. He will thoroughly analyze your situation, explain the short sale process and help determine the most viable solution given your circumstances.
To learn more about the short sale process or for more information about how to avoid it, please contact us any time. We offer free initial consultations.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.