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Cancellation of Debt

Discussion in 'Liens & Encumbrances' started by Mightydad, Mar 24, 2014.

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  1. Mightydad

    Mightydad Law Topic Starter New Member

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    I am way behind on my mortgage, but my house is not in foreclosure. Recently I received a Form 1099 for Cancellation of Debt. It is for my entire mortgage balance. What does this mean? What do I do now?
     
  2. mightymoose

    mightymoose Moderator

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    I'm not certain this is what you have, but if a lender writes off your bad debt they can report that to the IRS. The IRS will count the balance as income and require you to pay taxes on it the year it is reported.
    That seems unusual for a mortgage though... I'd expect them to foreclose the house.
     

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