Home Equity Line of Credit ...now risky too !

[2ez]

Quote from Vinny1:

If one is about to get foreclosed on, is the lender able to take whatever assets you have remaining to satisfy a deficit on a loan balance, meaning if the house is sold for less than the loan balance?

Do you have to file for bankruptcy if you don't have enough assets to cover the deficit or do they just take what they can get without one having to file for bankruptcy?

If they can take some of your assets to cover the deficit, can't one, before they get foreclosed on, just pull out all of their money from all of their accounts and stash it away somewhere and say they lost it gambling?

My cousin was given a W2 or something like this from his lender. He had to claim the difference as income. He was never approached about taken any of his assets.

This was a rental property of his.

 

[Vinny1]

Quote from 2ez:

My cousin was given a W2 or something like this from his lender. He had to claim the difference as income. He was never approached about taken any of his assets.

This was a rental property of his.

What happens if you don't have any money to pay the IRS on this debt that is forgiven that they call income?

 

[2ez]

That is a question that I was asked recently by another cousin. ( Dayum…I gotta find a new family…heheh) Different situation though. He was a realtor and didn’t pay taxes on some of the commissions he received from selling homes. Last couple of years he was selling homes so quick that he was able to foot the bill come tax time. Now that there is a slow down, he is in a jam. So different situation…yet same issue.

I am not sure what will happen here….but I would much rather deal with a lender than your Uncle Sam. Your Uncle has a reputation for being a bully and I know several people that have had their pay garnished.

Good Luck my friend.