Expert: David - 1/22/2009

Question
I have a house that was left to me in a Divorce in Florida that is being shortsaled after 2 years on the market for a loss of 110,000- I currently live in Texas with my current husband and after carrying 2 mortgages and utlilities on the home in Florida and the house we live in in Texas I had to stop paying on the home in Florida and let it shortsale- meanwhile, while trying to carry 2 mortgages I ran my credit cards up and drained my savings- I am now in credit card debt for 49,000 along with my shortsale of 110,000- I don't want to file Bk but don't see me getting out of this mess- in 2006 my credit score was 780, 21,000 in savings and no credit card debt, but this house from my divorced took all I had and them some-we just kept trying to stay above thinking the house would sell. The cards are all in my name as was the house in Florida, so we are hoping just I can file because my husband is not a part of all this. I should shortsale this week and I am sure I will get a 1099 from that loan of 110,000- loss - I thought about debt consolidation with my credit cards and claiming the shortsale on my taxes next year but would I be better to just throw it all into one BK- I am self employed and only make 1600.00 a month plus child support and don't want to involve my husbands income as this is all my debt. I am so confused- my husband also has a car repo last year due to the fact that we were making all these house payments- but we really want to avoid him filing because he is the main bread winner if we ever get a transfer and need to get another house-but some people say his credit is just as ruined. I am not late on any bills(except the house I am short sale in) and have never been late but every month it is so hard to keep making all these payments and now with this shortsale I feel overwhelmed. any advice- Do I just throw it all in BK and we try to clean his up or do I consolidate and claim the 1099 on next years taxes and hope I don't end up owing the IRS

Answer
Tracy-

This question is definitely very detailed. I'd like to point out that I specialize in credit repair.  Thus to advise you on the legal or tax consequences would be outside of my realm of expertise.  

I did not want to leave in the lurch so I did a some
research on the short sale part of your question and found a site with an attorney from Florida.

Here is the link :  http://www.bankruptcyorlando.com/2007/09/avoiding-tax-li.html

Perhaps contacting him or another attorney familiar with help you decide on the choice between Bankruptcy or taxes.

Sorry I could not provide more help but I hope this points you toward someone who can.

Good luck

David