Is a Deed In Lieu advisable after a Chapter 7 Bankruptcy discharge and is there any danger of reaffirming the discharged debt?

1. It's too late to reaffirm the debt, since a reaff. must be filed before you get your bankruptcy discharge. 2. Is a deed in Lieu advisable? That depends on a lot of facts which you have not stated such as how much you would like to keep the house, the cost of the monthly payments as against renting a decent place, or perhaps buying one, and so on. 3. While the bank may send you a 1099 reflecting forgiven debt, you are not bound by it. What many tax preparers seem not to know is that if a debt is discharged in a bankruptcy, there are no tax consequences for you, even if a debt forgiven outside of bankruptcy may sometimes give rise to taxable income. (And in such case the only taxable part of the forgiven debt is the part that leaves you balance-sheet solvent). Good Luck

Yes, typically. I would have a lawyer review the paperwork for you to be sure. The paperwork should address the tax issue you are asking about. Good luck!

A deed in lieu is one of the most damaging things that can happen to your credit. Do not assume that the bank?s inability to report on your loan payment will result in being able to hide from the consequences of a deed in lieu or a foreclosure. Believe me, credit information available only to industry insiders will clearly show that the property was taken by a deed in lieu and will prevent you from getting another mortgage loan for many years. If you did not reaffirm, the debt was not forgiven, and if you get a 1099C, it is a mistake your tax preparer can easily fix. If you did reaffirm, you need expert legal advice to minimize your liability.

First, you can't reaffirm a debt after the bankruptcy case is closed. It is possible, under rare circumstances, to convince the judge to allow a case to be reopened but certainly not after seven years. And I don't believe any judge would allow you to reaffirm a mortgage on a house that has been vacant for seven years (pretty hard to see how that would pass the "best interests of the debtor" test. A deed-in-lieu is certainly a better alternative than a foreclosure because the foreclosure would show up on your credit reports. The income from forgiveness of indebtedness occurred by in 2009 when the mortgage was discharged in your Chapter 7 and it was nontaxable because all forgiveness of indebtedness income in bankruptcy is nontaxable.