Sultana Blog

Mortgage Forgiveness Debt Relief Act of 2007 Expired as of December 31, 2013: Homeowners Seeking Foreclosure or Short Sales of Their Homes in 2014 Likely Will Be Faced with Big Tax Bill

Woman distressed over taxesThe Mortgage Forgiveness Debt Relief Act and Debt Cancellation expired December 31, 2013 and barring any unlikely last minute action from Congress, it will not be revived. This is not good news for homeowners facing foreclosure, loan modification, or considering short selling their home, because it means they may be facing a large income tax bill on any debt “forgiven” by the their home lender. This most likely will come as a shock to many unprepared homeowners at the end of the 2014. While lenders have negotiated debt, the Internal Revenue Service (IRS) typically does not. The good news is, if you are facing this situation and you are prepared, there could be a solution. What is The Mortgage Forgiveness Debt Relief Act and Debt Cancellation? The Mortgage Forgiveness Debt Relief Act of 2007 was a temporary law enacted by Congress intended to help homeowners through the mortgage foreclosure

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Sultana Law Wins $10,000 Sanction Against Bank of America for Violation of Federal Court Order to Cease and Desist Attempts to Collect Debt Discharged in Bankruptcy

SanctionsRecently, Sultana Law won a $10,000 sanction against Bank of America on behalf of a bankruptcy client when the lender continued to violate a federal court order to cease and desist all attempts to collect on a discharged debt. Under federal bankruptcy law, once a party files for bankruptcy with the bankruptcy court there is a mandatory pause on any collection activity. The legal term for this is “automatic stay.” What this means is, for the period of time the court is reviewing the bankruptcy case, creditors are not permitted to contact the debtor in an attempt to collect any debt included in the bankruptcy case. If the debtor has filed for Chapter 7 bankruptcy, often called “Fresh Start” bankruptcy, with some exceptions, most debt may be discharged. Once the bankruptcy case is concluded and the debt is discharged, the court will rule the debtor no longer

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Changes to Florida Foreclosure Law: Good and Bad News for Florida Homeowners

It’s no secret Florida is one of the states hardest hit by the mortgage foreclosure crisis. Because of the sheer number of foreclosures in Florida, it takes much longer for the banks to repossess homes here—an average of 853 days, compared with the national average of 414 days. However, the Florida legislature has been working to speed up the foreclosure process and clear the logjam this crisis has caused in the courts. In June of this year, Governor Rick Scott signed into law House Bill 87, Florida Fair Foreclosure Act. The bill has good and bad consequences for Florida homeowners. First, the bad news: The overriding goal of the law is to speed up the foreclosure process, which can be detrimental to homeowners because it could mean less time for homeowners to be considered for a loan modification, forbearance, repayment plan, or some other alternative transition such as

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