Bankruptcy Law/bankruptcy

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Expert: - 1/24/2011


Question
About a year ago I filed for bankruptcy ch. 7 and released a rental row house in Baltimore, md. The bankruptcy was successfully discharged. The mortgage bank was National City Mortgage. Today I received a form 1099-A from PNC Mortgage Services. No. 2 shows outstanding principle 47k, no. 4 shows fair market value 60k, no. 5 says "was the borrower personally liable for repayment of this debt?" and "yes" is checked.
My questions are doesn't bankruptcy release the debts if they are in the papers filed? Also, how does a rental home released at bankruptcy affect taxes?

Answer
This is pretty standard.  The 1099 is for forgiveness of debt income, so it is BECAUSE the bankruptcy discharged the debt that you are receiving that.  Per Internal Revenue Code 108, forgiveness of debt income is not includable in gross income, but it can be used to reduce certain tax attributes, such as loss carryforwards, etc.  You need to consult with a CPA or tax attorney for further tax advice.

Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/  

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

Experience

Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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