I am a 50 yr old who has two sons that are 8 and 18 years old. I am starting over again after a failed marriage and failed business. Fortunately, I am now gainfully employed after a year and half of having no job. However, I am trying to play catch up a

ANSWER

The BIDaWIZ Team's Answer:

Since you are now employed, you should not consider selling the property in the present economic

environment. You will not realize any income, from the "short sale," and the amount of debt that is forgiven,

by the lender, will be deemed "cancellation of indebtedness" income, which is taxable income, to you, in the

year of sale. So, for example, if the debt forebearance amount equals $50,000, and your highest marginal

tax bracket is 20%, you will owe federal income taxes, of $10,000, from the short sale. As for the credit card debt,

you can offer a partial settlement offer, to the credit card company; however, any debt foregiveness principal will

be subject to taxation; commensurate with the real estate short sale analogy. Bankruptcy can be reserved as a last

resort, to discharge the credit card debt, without a tax ramification.