Consumption and Real Estate
Am I liable for the debt on a HELOC after my home was foreclosed on?
Question : Am I liable for the debt on a HELOC after my home was foreclosed on?
My home went to foreclosure sale 6 months ago. I continue to be unemployed and a collection agency is attempting to collect the $ 80,000 I had in a HELOC loan. Am I liable? The home sold for far less than our total loan. Both the HELOC and First were with Countrywide.
heloc loans
Best answer:
Answer by goz1111
HELOC is a recourse loan, so yes you are liable for the monies from the HELOC
Yes it is a recourse loan.
If the bank would have forgiven the HELOC, you would have been issued a 1099-c and that $ 80,000 would have been reported to the IRS as income and taxable as normal income. Then you would have a debt that you can’t get out of even with bankruptcy.
If you file bankruptcy on the HELOC, a 1099-c will be issued.
You will likely also get a 1099-c on your first mortgage but due to the “Debt Foregiveness Act of 2007″, forgiven debt on first and second mortgages on a primary residence are currently not taxable.