Expert: Norma Duenas - California Bankruptcy Attorney - 1/24/2011

Question
About a year ago I filed for bankruptcy 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
If you surrendered the property as part of your bankruptcy case then your liability was removed as part of the bankruptcy case. You should not be held liable for the outstanding mortgages on the rental house that you surrendered. There should also not be any tax consequences if the debt was discharged as part of your bankruptcy case. It is common practice for many lenders to send out these forms and it does not mean that you have a tax liability.

If you have any further questions you can contact me at: http://www.socaladvocates.com/riverside-bankruptcy-attorney