Americans struggling with substantial mortgage debt that exceeds the value of their home have several options, including a short sale, foreclosure, or mortgage restructuring. Traditionally, any of these options that results in forgiving or discharging some of the debt on their primary home results in a form 1099-C, Cancellation of Debt, from the lender.
The IRS considers most forms of cancelled debts, including mortgage debt, as income for the recipient. This can mean a tax bill of thousands of dollars, even if you lost the home in foreclosure.
The Mortgage Forgiveness Debt Relief Act of 2007 was passed at the height of the foreclosure crisis, gives homeowners tax relief from this forgiven debt. Here's what you need to know about the Mortgage Forgiveness Debt Act.
Public transport doesn't meet the transportation needs of many Americans and an increasing number of people are deciding to own cars.
The easiest way to pay for a car is by cash or check but not many people can afford to pull out $20,000 to buy a car and drive it off the lot. Hence, most car buyers need to take up one form of auto loan or another.
Accidents happen to the best of us. Some are relatively painless, others are incredibly painful -- not just in the emotional or physical sense but in the financial sense as well.
Take car accidents, for example. Even a minor fender bender can set your finances back months or even years.
How are you supposed to get back on track after an accident wipes out your emergency fund, increases your insurance, and leaves you holding what will likely be a substantial bill?
There are around 1,000,000 bankruptcies every year in the US.
Obviously, it's a problem. A problem that can be avoided, but if you're past the avoiding stage, it may be your best option.
Let's dive in and discuss the different types of bankruptcy, when to file, when not to file, and the effects of filing.
Americans are in a lot of debt.
Between credit card debt, the rise of student loans, and the ever-in-flux real estate market, it’s harder and harder for people to live without some form of debt.
Exact figures are hard to come by, as credit card debt, also known as “revolving” debt and consumer debt, is measured separately from debt like student loans and mortgages.
That makes sense, as they are very different, but that separation often disappears when financial advice is given.
So you've decided that a life of debt isn't for you.
Congratulations! Good choice. Welcome to the club.
You know the first step to seeing big results is to sell your expensive vehicle, but there's one problem.
You're upside down. Way upside down. And it looks like you may not get flipped back over.
Don't panic! You have some options, and you can still make this work. Here's how.