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Los Altos Bankruptcy Lawyer

Your local bankruptcy attorney is our Los Altos bankruptcy lawyer from West Coast Bankruptcy Attorneys. West Coast Bankruptcy Attorneys has the experience and resources to file your bankruptcy case quickly and accurately. The vast majority of the work in a bankruptcy case should be before the actual bankruptcy petition is filed. At West Coast Bankruptcy Attorneys we believe that all cases should be filed with a petition that is a true and correct as possible.

Los Altos Bankruptcy Office

San Jose Office (Satellite)
111 North Market Street
Suite 300
San Jose, CA 95113

Toll Free: 1-877-9NEW-LIFE
Fax: 650-366-4875

Free No Obligation Consultation

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One of the major issues facing homeowners is whether or not their mortgage company will come after them for the difference between the value of their house and what it is now worth at the time of foreclosure. In California a mortgage company can foreclose on a home by either judicial foreclosure or a non-judicial foreclosure. In a judicial foreclosure a deficiency judgment can be obtained. A deficiency judgment would be obtained to try and collect the difference between the value of the house and how much is owed on the mortgage at the time of judicial foreclosure. A judicial foreclosure is much more expensive and takes much longer than a non-judicial foreclosure. Almost all foreclosures in California during the mortgage meltdown are non-judicial foreclosures. Furthermore, under California state law if the mortgage was obtain at the time of purchase, for the purchase of the house, the mortgage is a purchase mortgage security interest (PMSI) loan and therefore no deficiency can be collected if the house is foreclosed on.

The real issue is what about a line of credit or second deed obtained after the time of purchase? Well, that is a different story. The company that issued the line of credit or second deed of trust does have legal rights to seek payment after the house is foreclosed on. The good news is that rarely will the second mortgage or line of credit holder actually sue you for payment. They will instead write off the amount owed as bad debt and issue a 1099-C. Now the issue is whether this is taxable income? You do not have to pay taxes resulting from receiving a 1099-C if discharge via bankruptcy, or you were insolvent at the time of the event (foreclosure). See IRS form 982 and consult with you a tax professional to determine if you were insolvent and therefore the 1099-C is not taxable income. Schedule a confidential free consultation with our experienced bankruptcy lawyers in 94022, 94023 and 94024 zip codes.