Expert: liznarr - 8/5/2009

Question
I am trustee for my deceased father's estate. After paying bills and such only his house is left.  There was one credit card bill we had no money to pay.  I received a 1099c form (cancellation of debt) with the full amount that was owed on it.  I did not ask for this cancellation. It was also reported on the income tax return filed for the estate.
Now I am trying to get a home equity loan (there is no mortgage) in order to make improvements on the house so we can list it with a property management company.  Now, come to find the credit card company has placed a lien on the house.  I received no notification that the credit card company was going to do this, nor any notification that they had sued and received a judgement.  Is this lien legitimate?
Thank you in advance for any help you can give me.

Answer
Hi Nancy,

Your question is more of a legal and/or tax question.  I am not up-to-date on this topic, and I am not qualified to give you legal or tax advice…sorry.  It does, however, sound like you have done “all the right things.”

I think the question of whether or not the creditor forgave or canceled the lien would come into play.  At any rate, I would suggest you contact a good tax attorney for advice.

Here is a web site that has some explanations regarding 1099c issuance, and outlining the types of companies that can legally issue them:
http://www.ask.com/bar?q=When+1099+C+issued%2C+can+creditor+also+file+lien%3F&pa...

I would be interested in hearing what you find out if you don’t mind emailing me again through the All Experts’ site.

Good luck to you, and write again if you have other questions I am qualified to answer.

Regards,
Elizabeth