Government refinancing of home loans

I had to file Ch 7 back in the day because my ex decided to go for the pink Mary Kay Caddy

I am getting more knowledgeable everyday about the bankruptcy code. As I have disclosed on the forum before, I had a 550k line of credit on my business with a bank which was shut down by the FDIC. They guarantee 80% of the loan with the new bank.....but they only do it for five years. They renewed my note because we never were late or missed a payment, but the note matures in September 2013, and they have sent me a letter saying I must sell the business or get another bank to refinance the loan.......well we have lowered the debt to 440k......but no bank will take the collateral of the business and another building I own......and over 100k free and clear equipment. My wife has told me with me getting weaker that she cannot assume the responsibility alone of the day to day business requirements, and even though she has retired......she is saying walk away, and lets enjoy the time we have. We have other properties and fortunately her pension and my protected SEP and IRA which will allow us to live very comfortably for the time I have left....yet I have never walked away from any obligation in my life.....but the banks are simply not going to renew the note.....even though we can make the payments, and have never missed a payment.......so you had a pink shaft.....I had a flood which took out 243k uninsured damages to the business then in June 2008 the lung being removed with cancer....and lower earnings for the last 5 years.......nope....unless something off the charts happens with the business, or the bank changes their position I will probably have to file a business bankruptcy for one of my business operations. Stuff happens.

What pisses me off is that the Federal Gubment finds ways to tax your arse on their definitions of "profit", but they don't let you take a deduction on the sale of a house if you absorb a loss. My wife's job was transferred from Atlanta to Birmingham and we took a 30k loss. We weren't allowed to deduct a penny of it.

2seaoat wrote:The Chapter 7 bankruptcy will depend on how much disposable income they have. You just can't file a Chapter 7 anymore because you have too much debt anymore. They may have to file a Chapter 13 and make payments.

Well here we go chasing our tails again. First, you cannot file a chapter 7 if you do not meet the means test set forth in the Bankruptcy reform act of 2005.......so exactly why are we discussing a chapter 13 when you argue that a person who has filed a chapter 7 liquidation owes taxes on forgiven debt.....this borders on insanity.

However, you are way too intelligent, so I can only assume that you are talking about Z's situation where his son in law is looking for a method not to address the deficiency judgment and the 1099. In that context the professional that they go to will use software which will take the last 6 months of their average wages, and compare the standard for the area of the country you reside based on IRS allowances and zip code. In fact depending on the latest tables a couple could make too much income, and all there debt is consumer debt. However, if the majority of their debt was business the means test is not used. So in fact the means test will probably be applied, but even if the kids fail the means test, the deficiency judgment will be considered a non secured debt and would become part of the plan which the professional will tell you the number of payments between 36-60, and even in the context where they will be repaying some percentage of unsecured debt from 10% to 100%....the balance of that debt not repaid to the lender will be discharged and there will be no IRS obligation as long as the Chapter 13 filer is in fact INSOLVENT.

Because I never said anything of the kind for the third time,Seaoat. What is the matter w/ you? All you've done is repeat what I said in more detail. You can bankrupt-do you get that word? on credit cards and the IRS will treat the forgiven debt as taxable income. I should have said "forgiven".Jesus Christ!

They also consider bankruptcies on credit cards as taxable income.

Dreams please tell me how I could have misinterpreted this completely false statement?

Because I never said anything of the kind for the third time,Seaoat.

If you go bankrupt on your credit cards meaning you don't have the means to pay them and yes, they are forgiven or agreed to take a lesser payment,you still can owe the IRS for taxable income because you received inkind or money for whatever you got on those cards.

If you go bankrupt on your credit cards meaning you don't have the means to pay them and yes, they are forgiven or agreed to take a lesser payment,you still can owe the IRS for taxable income because you received inkind or money for whatever you got on those cards.


Ok, you really do not know what you are talking about.....but this should be interesting. John Doe owes 40k to BOA on Visa credit card. John Doe files a chapter 7 bankruptcy and is found to have no assets at his 341 meeting......John Doe owes not one red cent to the IRS.....period.

I am certain you have been feigning this ignorance.....but tell me how you reconcile your statement: They also consider bankruptcies on credit cards as taxable income.
with John Doe's Bankruptcy.....he filed bankruptcy on a credit card dreams....now tell me where he owes one red cent?

Dreamsglore wrote:If you go bankrupt on your credit cards meaning you don't have the means to pay them and yes, they are forgiven or agreed to take a lesser payment,you still can owe the IRS for taxable income because you received inkind or money for whatever you got on those cards.

I have a nephew that filed Chapter 7 in 2007. He had credit card debt up the kazoo. He met the requirements of the "means test". When the bankruptcy was discharged, he paid not a penny to anyone. He owed 15k on one card and 25k on another. These charges were written off. He got a copy of his credit report and both credit cards companies indicated that the loans were included in the bankruptcy.

Not only did he not pay the creditors, but unlike what Dreams has been saying......that discharge of the debt did not become a taxable event in a no asset Chapter 7 liquidation.

What dreams is misconstruing is the idea that a lender who forgives part of a debt converts that non payment of debt into ordinary income......that is the rule where bankruptcy is not involved.....she fails to understand even the rudimentary concepts in this thread which have been discussed, she has been provided the link which gives her the IRS regulations, and numerous posters have attempted to give examples......she simply tries to cover up what she has said because it would expose a huge conceptual gap of understanding......and she has displayed this behavior pattern so many times when she is beyond her understanding..........I will now get a FU Seaoat, but a person with integrity would simply say.....you know what Seaoat.....I did not understand that Insolvency and a Chapter 7 discharge removes any tax liability on an unpaid credit card.....its pretty easy to admit you are wrong.

Health worker, pilot, bus driver, bankruptcy specialist, &...

*****SMILE*****

https://www.youtube.com/watch?v=jhC1pI76Rqo

2seaoat wrote:If you go bankrupt on your credit cards meaning you don't have the means to pay them and yes, they are forgiven or agreed to take a lesser payment,you still can owe the IRS for taxable income because you received inkind or money for whatever you got on those cards.


Ok, you really do not know what you are talking about.....but this should be interesting. John Doe owes 40k to BOA on Visa credit card. John Doe files a chapter 7 bankruptcy and is found to have no assets at his 341 meeting......John Doe owes not one red cent to the IRS.....period.

I am certain you have been feigning this ignorance.....but tell me how you reconcile your statement: They also consider bankruptcies on credit cards as taxable income.
with John Doe's Bankruptcy.....he filed bankruptcy on a credit card dreams....now tell me where he owes one red cent?

Here Seaoat,maybe you'll understand this. I have misjudged your level of intelligence. I never said anything about filing a bankruptcy.Take Chapter 7 out of the equation.If you bankrupt on credit cards, in other words don't have the money to pay them and make an agreement for a lesser amount YOU CAN STILL OWE THE IRS TAXES ON THE AMOUNT YOU BANKRUPTED ON! The discussion was about homeowners refinancing upside down mortgages. Do you get this now?

bank·rupt·cy
noun \ˈbaŋk-(ˌ)rəp(t)-sē\
plural bank·rupt·cies
Definition of BANKRUPTCY
1
: the quality or state of being bankrupt
2
: utter failure or impoverishment

1099-C surprise: IRS tax follows canceled debt
Forgiven credit card debt may be taxable income
By Connie Prater

If you thought your money woes ended last year when you settled that credit card debt, think again.
Cancellation of debt: 1099-C
Avoiding 1099-C tax problems

What you should know: Have you negotiated with a creditor to pay less than you owe on a credit card debt? The IRS considers forgiven or canceled debt as taxable income.
What to do: Experts advise consumers to seek tax advice before negotiating credit card debt settlements to avoid a "surprise" tax hit from cancellation of debt.

For many consumers with debt problems, after the debt collector leaves their lives, the taxman arrives.

Months after successfully resolving credit card debts, consumers may receive 1099-C "cancellation of debt" tax notices in the mail. Why? The U.S. Internal Revenue Service considers forgiven or canceled debt as income. Creditors and debt collectors who agree to accept at least $600 less than the original balance are required by law to file 1099-C forms with the IRS and to send debtors notices as well. Taxpayers must report that portion of forgiven debt as "income" on their federal income tax returns.

"A lot of people don't realize they have any tax issues at all when they are going through this," says Alison Flores, a researcher at The Tax Institute at H&R Block, the nation's largest tax preparation service. "They say 'I'm really poor, I'm broke and I can't pay my bills. How can you consider this income?'"

It is, according to the Internal Revenue Code. For example, a person with $10,000 in credit card debt who negotiates to pay only $6,000 of the balance would have $4,000 in forgiven debt income. That $4,000 must be reported as "other income" on Line 21 of the 1040 tax form. Depending on the amount of debt forgiven, the taxpayer's income level, deductions and other factors, the consumer could face a sizable tax bill come mid-April.

Read more: http://www.creditcards.com/credit-card-news/forgiven-debt-1099C-income-tax-3513.php#ixzz2GUFzmjqt
Compare credit cards here - CreditCards.com

2seaoat wrote:Not only did he not pay the creditors, but unlike what Dreams has been saying......that discharge of the debt did not become a taxable event in a no asset Chapter 7 liquidation.

What dreams is misconstruing is the idea that a lender who forgives part of a debt converts that non payment of debt into ordinary income......that is the rule where bankruptcy is not involved.....she fails to understand even the rudimentary concepts in this thread which have been discussed, she has been provided the link which gives her the IRS regulations, and numerous posters have attempted to give examples......she simply tries to cover up what she has said because it would expose a huge conceptual gap of understanding......and she has displayed this behavior pattern so many times when she is beyond her understanding..........I will now get a FU Seaoat, but a person with integrity would simply say.....you know what Seaoat.....I did not understand that Insolvency and a Chapter 7 discharge removes any tax liability on an unpaid credit card.....its pretty easy to admit you are wrong.

Except nobody said anything about a Chapter 7.You have assumed I meant a Chapter 7 and I did not. I used the word "bankruptcies" which does not mean a Chapter 7.It means you are broke.You have gone on and on about something you misconstrued. I know very well a Chapter 7 wipes out credit card debt. Now if you were a person of integrity you would admit you made a big deal out of something you misinterpreted. Your not as smart as you think you are and actually as I thought you were. I'll admit I was mistaken about you.

They also consider bankruptcies on credit cards as taxable income.

You are completely void of knowledge or integrity......Bankruptcy is a constitutional directive to Congress to establish uniform bankruptcy laws......Do you even understand the concept that in America.....Bankruptcy is statutory.....that means it is defined by statute not some generic concept of insolvency you pluck out of thin air to try to cover up your continued ignorance in so many areas. I have often been patient with your lack of knowledge on issues, but who is the bigger fool to have a discussion with a fool....... me....you simply do not understand things which are really quite simple?

So let us start with the English Language.......you said THEY in the above statement. It is inferred that the THEY is the internal revenue service, because any other THEY is entirely irrelevant to who determines what is taxable income in America(of course now that you are picking definitions which have zero relevancy in America.....I suppose you will argue that you were talking about Great Britain....

Now if you had not used a statutory term.....for the sake of argument.....I will enter stupidville......and say that somebody using the term Bankruptcy....really did not mean what that word means in America......it simply means a person is settling their credit card debt for a lesser amount.....WTF not one educated American would use your words.....but again for the sake of entertainment......did you read your post......It was a 1099 for SETTLED debt.......a settled debt in not a bankruptcy, and your idiotic attempt to bootstrap your incorrect knowledge of the same cannot be hidden in your obscuring this simple concept......Read slowly Dreams......you were wrong the first time, and you are wrong now trying to call a settled debt bankruptcy.......this is like talking with a five year old child about the internal combustion engine....but papa I was talking about the squirrels on the treadmill.......

You need to enter stupidsville,Seaoat because apparently you are. I have posted the definition of the word. The word bankruptcy does NOT have a statutory congressional meaning in the context of the word. It means broke, impoverished,insolvent, defaulter ie,NO MONEY! They didn't just invent the word when they made bankruptcy laws. The word bankruptcy in America means just that. You're just trying to make a nitpicky argument out of your stupid assumption. It's quite juvenile of you.You should have just said I misinterpreted what you said... but no. You act like you're so superior in your knowledge and quite frankly...you're not. You're just a bluffer and I find it humorous.

2seaoat wrote: They also consider bankruptcies on credit cards as taxable income.

You are completely void of knowledge or integrity......Bankruptcy is a constitutional directive to Congress to establish uniform bankruptcy laws......Do you even understand the concept that in America.....Bankruptcy is statutory.....that means it is defined by statute not some generic concept of insolvency you pluck out of thin air to try to cover up your continued ignorance in so many areas. I have often been patient with your lack of knowledge on issues, but who is the bigger fool to have a discussion with a fool....... me....you simply do not understand things which are really quite simple?

So let us start with the English Language.......you said THEY in the above statement. It is inferred that the THEY is the internal revenue service, because any other THEY is entirely irrelevant to who determines what is taxable income in America(of course now that you are picking definitions which have zero relevancy in America.....I suppose you will argue that you were talking about Great Britain....
Now if you had not used a statutory term.....for the sake of argument.....I will enter stupidville......and say that somebody using the term Bankruptcy....really did not mean what that word means in America......it simply means a person is settling their credit card debt for a lesser amount.....WTF not one educated American would use your words.....but again for the sake of entertainment......did you read your post......It was a 1099 for SETTLED debt.......a settled debt in not a bankruptcy, and your idiotic attempt to bootstrap your incorrect knowledge of the same cannot be hidden in your obscuring this simple concept......Read slowly Dreams......you were wrong the first time, and you are wrong now trying to call a settled debt bankruptcy.......this is like talking with a five year old child about the internal combustion engine....but papa I was talking about the squirrels on the treadmill.......

I gave you a plus for this.

I said bankruptcies on credit cards. Do you know what it means to go bankrupt on a credit card?

Gee Dreams......what does it mean to go bankrupt on a credit card? Why don't you call your credit card company and ask your question.....do you know what it means to go bankrupt on a credit card...........papa......how do you feed the squirrels?

I gave you a plus for this. Laughing


yes.....and hell just froze over, but Dreams gives opinions which she does not know the underlying basis why things are done a certain way....and then she tries to spin her ignorance.....been there and done that.......all she had to say is.....you know Seaoat.....I was wrong the first time.......I was wrong the second time when I tried to argue that a settled debt is a bankruptcy......you see Dreams.....the IRS is the one who has definitions, and THEY do not share your definition anywhere in the regulations......Of course your surgeon when removing your head from your butt will say.......give me one of those watcha ma call it things on the tray......yep.....the tax code has controlled our discussion from the beginning, and learned folks who have dealt with the IRS understand that if they are going to determine income, it must be under their definitions.....not someone who is going to need a tow truck to remove their head from the nether regions where evidently you get your answers.

Hey Seaoat:

Show me where I said a settled debt is a bankruptcy?Come on? Where did I say a settled debt is a bankruptcy?

Again,

"THEY CONSIDER BANKRUPTCIES ON CREDIT CARDS AS TAXABLE INCOME"
You can't comprehend that sentence,can you? Hmmm!

Chrissy wrote:

2seaoat wrote: They also consider bankruptcies on credit cards as taxable income.

You are completely void of knowledge or integrity......Bankruptcy is a constitutional directive to Congress to establish uniform bankruptcy laws......Do you even understand the concept that in America.....Bankruptcy is statutory.....that means it is defined by statute not some generic concept of insolvency you pluck out of thin air to try to cover up your continued ignorance in so many areas. I have often been patient with your lack of knowledge on issues, but who is the bigger fool to have a discussion with a fool....... me....you simply do not understand things which are really quite simple?

So let us start with the English Language.......you said THEY in the above statement. It is inferred that the THEY is the internal revenue service, because any other THEY is entirely irrelevant to who determines what is taxable income in America(of course now that you are picking definitions which have zero relevancy in America.....I suppose you will argue that you were talking about Great Britain....
Now if you had not used a statutory term.....for the sake of argument.....I will enter stupidville......and say that somebody using the term Bankruptcy....really did not mean what that word means in America......it simply means a person is settling their credit card debt for a lesser amount.....WTF not one educated American would use your words.....but again for the sake of entertainment......did you read your post......It was a 1099 for SETTLED debt.......a settled debt in not a bankruptcy, and your idiotic attempt to bootstrap your incorrect knowledge of the same cannot be hidden in your obscuring this simple concept......Read slowly Dreams......you were wrong the first time, and you are wrong now trying to call a settled debt bankruptcy.......this is like talking with a five year old child about the internal combustion engine....but papa I was talking about the squirrels on the treadmill.......

I gave you a plus for this.

You need to stay in the closet,Moron, w/ your immigrants and criminal records.

2seaoat wrote:I said bankruptcies on credit cards. Do you know what it means to go bankrupt on a credit card?

Gee Dreams......what does it mean to go bankrupt on a credit card? Why don't you call your credit card company and ask your question.....do you know what it means to go bankrupt on a credit card...........papa......how do you feed the squirrels?

I know what it means to go bankrupt on credit cards. I find it interesting that you don't. Hmmm-somethings not kosher here.

You need to stay in the closet,Moron, w/ your immigrants and criminal records.



I used to think it was Chrissy 70% and Dreams 30% in being unreasonable.......I think this thread has convinced me otherwise.


"THEY CONSIDER BANKRUPTCIES ON CREDIT CARDS AS TAXABLE INCOME"
You can't comprehend that sentence,can you? Hmmm!

Now, please go to the IRS definition of bankruptcy in the link I provided you.....and tell me what you discover......and yes....you are completely right I cannot comprehend anything you have attempted to say on this thread. It is like talking to my four year old granddaughter......but she really believes her stories, and you think you understand something which you are entirely clueless. If Chrissy has faced this ignorance, I can see why she responds to you the way she does....and she hates me.....so I am offically calling your continuing feud with her 50/50.

2seaoat wrote:You need to stay in the closet,Moron, w/ your immigrants and criminal records.



I used to think it was Chrissy 70% and Dreams 30% in being unreasonable.......I think this thread has convinced me otherwise.


"THEY CONSIDER BANKRUPTCIES ON CREDIT CARDS AS TAXABLE INCOME"
You can't comprehend that sentence,can you? Hmmm!

Now, please go to the IRS definition of bankruptcy in the link I provided you.....and tell me what you discover......and yes....you are completely right I cannot comprehend anything you have attempted to say on this thread. It is like talking to my four year old granddaughter......but she really believes her stories, and you think you understand something which you are entirely clueless. If Chrissy has faced this ignorance, I can see why she responds to you the way she does....and she hates me.....so I am offically calling your continuing feud with her 50/50.

I have NEVER hated you.

Disagree on some positions, not all yes, but hate. no.

Good luck to ya

Listen Seaoat, I'm not going to continue arguing w/ you over my use of the word "bankruptcies". Believe what you want. I know what I said and meant and you do too. I see you're just looking to agitate since you mentioned Chrissy. My New Year's resolution is to try and ignore stupid posters which she is #1 on my list of the stupidest. It will be a struggle but then again the new year hasn't started yet.

I know what it means to go bankrupt on credit cards. I find it interesting that you don't. Hmmm-somethings not kosher here.


How did that form filling business on Bankruptcy and Divorce end up for you.....I certainly think I know the answer.......but again what does it mean to go bankrupt on a credit card? I have never heard the term "go bankrupt on a credit card" before this evening......but tell me again what you meant because maybe I have confused with your utter lack of knowledge of the IRS or Bankruptcy rules with a simple ignorant twisted piece of poor grammar. Did you mean that the credit card debt was discharged in Bankruptcy? Did you mean that a person was insolvent and had no assets to pay the credit cards? Did you mean that the person did not have enough to cover the credit card debt and then "settled" the debt? You know.....like me saying......I went bankrupt on last month's Bell South bill.....or I went bankrupt on paying the tip last night. It will become a new definition on Wiki.....the Dreams codicil........for Black's Law Dictionary.....and as we go over the fiscal cliff you can redefine the deficit next.

Dreams it is this simple. You did not know that a person who is discharged in bankruptcy does not have any obligation for the foregiven debt. What is worse, you did not even bother to read the IRS regs which also exempt insolvency which you have now argued as your definitional nexus and as in any other interpretation makes you completely wrong once more as you attempted to cover your silliness with just more ignorance. Try to edit your posts......but the facts remain.....you are clueless on this subject.

That's correct,Seaoat. It means you have no money to pay it. That's what bankrupt means. FYI, I did very well in my business and furthermore, I did my own bankruptcy many years ago after a divorce where I got stuck w/ all the bills because it was my credit it was under so you don't really have anything up on me. In fact, I had liens on my house and I got those off too. So if you want to know anything about personal bankruptcy-just ask me. I''l give you an education you're sorely lacking. And lastly,bankruptcies on credit cards are taxable income. That's a fact.

give you an education you're sorely lacking. And lastly,bankruptcies on credit cards are taxable income. That's a fact.


You are a fool. I am a bigger fool thinking that you were not a fool. Sorry your comprehension is sadly lacking to understand this subject. A debtor who discharges a credit card debt in bankruptcy owes no tax on the forgiven amount of the debt.....zero. Also, as we were talking about foreclosed properties.....if the debtor files a bankruptcy, the deficiency judgment on the property is also discharged, and that forgiven debt is also.....not taxable.

You are clearly delusional about what you understand, and how you can make other people understand things which you have neither the training or aptitude to understand yourself. The worse part if you were telling family and friends that they will have to pay taxes on the discharged debt in bankruptcy you are hurting people who are as ignorant as you are......fortunately, if this forum is any indication....they to would come to my conclusion probably years ago.