"I'm headed for a bankruptcy, Chapter 7, and my house is being auctioned off on Jan. 6th, 2011. I need to file before this date to stall the auction, and need to have my taxes completed for this to happen. I closed my business at the end of 2009, and have been collecting unemployment all year. What is the simplest, fastest way to file my 2010 taxes?”==================> Whether or not you can stall foreclosure proceedings depends on a number of factors, like the type of foreclosure proceedings allowed in your state, how far behind you are on your payments, and how willing your lender is to make alternate payment arrangements. Whether you simply want to buy a bit of time to live in your house until you find someplace new, or whether you need time until you can come up with the money to pay your arrearages. You may declare bankruptcy. Even if you file just days before the property is to be sold at auction, the foreclosure process will generally be stalled for a few months while the bankruptcy is pending. Bankruptcy can help you save your home if you discharge other debts or restructure a payment plan in a way that allows you to make your mortgage payments. On the other hand, if you still won't be able to make your house payments, using this tactic to stall foreclosure proceedings can buy you some time to save up enough money to move to a rental property.Filing bankruptcy is a step that should not be taken lightly, since it has far reaching consequences. If you are considering declaring bankruptcy to stall foreclosure proceedings, it's important to consult with a qualified attorney in your jurisdiction.Work with your lender to modify your mortgage loan. If you are in default or in the foreclosure process due to a temporary hardship, such as unexpected job loss, but you expect a return to a sustainable level of income, your lender may work with you to modify the terms of the loan so that you can get caught up on payments and save your home. The goal of using this strategy to stall foreclosure proceedings is to permanently restore your ability to make your mortgage payments.
NOTE; If you are considering a real estate short sale of your home, you should be aware that you may receive a form 1099-C for the amount of the lender's losses. This is considered loan forgiveness in the eyes of the IRS.If you have other assets such as saving and you are not insolvent, you may end up being responsible to pay ordinary taxes on the amount of the 1099-C.If you settle a debt with a creditor for less than the full amount owed, you may be required to report this forgiven debt as regular income, with certain important exceptions. The forgiven debts include money owed after foreclosure or property repossession or credit accounts that you don't pay. There are exceptions. If a lender forgives or writes off $600 or more of a debt's principal (the amount not including interest or fees) must send you and the IRS a Form 1099-C at the end of the year. When you file your tax return for the tax year in which your debt was written off, the IRS will require that you report the amount on the form as income.While you may not have received this form from the creditor, the creditor may have submitted one to the IRS anyway. If you don’t list the income on your tax return and the IRS has the information of the transaction on file, you could get a tax bill or, worse, an audit notice. This could end up costing you more than just the original tax bill. There are several exceptions stated in the Internal Revenue Code. For example, you do not have to report the income on your tax return if the write off of the debt is intended as a gift, you discharge the debt in bankruptcy, or you were insolvent before the creditor agreed to settle or write off the debt. You should consult a qualified tax and legal counsel to see if these circumstances apply.