foreclosure in CT

The bank has no automatic right of the seizure of any assets for the deficiency in a foreclosure sale of a home. This does not mean that they cannot go to court and obtain a court order to seize assets in conjunction with the deficiency of a foreclosure sale, but it is not automatic. Once you have reached the stage of a foreclosure sale and you realize that there will be a deficiency, as most are, one of the best choices is considering filing a chapter 7 bankruptcy. The reason for this is the banks can come back after you for the deficiency payment or which is most likely, they will send the deficiency to the IRS as a loss for them, but the IRS will consider this as income for you. This can be extremely dangerous, if your home is sold for let's say $100,000 less than the mortgage, that will be applied to your tax return of that year as you received income equal to the amount of the deficiency payment. Basically if the house had a mortgage for 200,000 and it sold for 100,000, your deficiency payments would be 100,000 and the IRS would consider this income of $100,000 which you would have to pay income taxes on. I have responded to your inquiry according to the laws of Massachusetts, where my firm is located. Laws can vary significantly from state to state and cases tend to be rather fact-specific, so you are best served by consulting with a knowledgeable attorney in weighing your options. Email messages/Online Correspondence are akin to conversations and do not reflect the level of analysis applied to formal legal opinions. Email/Online responses do not form an attorney-client relationship.    Joseph F. Botelho, Esq. BOTELHO LAW GROUP Attorneys At Law http://massachusettslawyeronline.com/ 901 Eastern Ave.  Unit 2 Fall River, MA 02723  Office:  888-269-0688 FAX:    877-475-8147 #bankruptcy  #lawyer  #FallRiver  #Chapter7  #chapter13  #debt  #debtsettlement  #foreclosure  #attorney   #cantpaybills  #lawsuit  #court  #bankruptcycourt  #eviction  #lostmyjob