I have to tell someone; hope U don't mind!

CEFreemanDecember 2, 2011

I am absolutely stunned right now. In a fabulous way.

Background: My husband bailed on me, leaving me $587,341.53 in debt. I concentrate on my mortgage and utilities.

Here's my wild last month:

After being prompt with my modified mortgage for a year, the bank submitted my HE loan to a new govt mod program. I knew nothing about this. Based upon my debt load, (lack) of equity in my home, the program has forgiven (FORGIVEN!!!) $121,751.29. Huh!?

About 2 weeks later I received a letter from a lawyer suing me for another debt of my STBX'. We were to go to court in February. The letter requested the court dismiss the suite. After I got up off the ground and put my teeth back into my head, I called and asked him why? He said he didn't know but the instructions came from BOA. He was happy to dismiss $55,000.00 because I'd been so great about collections, even though I hadn't paid a cent. woooooowwww.

Today I went to court for a hearing to garnish my wages for a Discover suite (again, STBX'). After the nice young lawyer looked over my financials, he looked at me and said, "Wow. We can't get blood from a stone and you sure are one big stone." He asked the judge to dismiss the $17,598.27 suite.

That's $195,152.27 disappeared in less than 30 days. Money my DH used for his business while he didn't work for almost a year -- of which I was unaware. Granted, I'm still $406,000.00 or so in debt, but now I have one mortgage on my house, which is better than most people in America! I'll get those tax forms at the end of the year showing this as income, but I'll deal with that when it comes. I'll be super waitress/super bartender/super yoga teacher. :)

I live in faith that things will work out in a way I hope. I try not to dwell on the things that aren't so great. So far, got my house, got my health, got pet food, got heat, got some electricity and got a brand new, butcherblock countertop in progress.

Thanks.

I had to tell someone.

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mama goose_gw zn6OH

CEFreeman, what great news!! Love your positive attitude, and though I don't comment often, I love your 'I can do anything' attitude, too. I remember the first post of yours that I read, when you were new to GW and using your married name. It was about building your own cabinets, and I thought you were such an inspiration to all DIY'ers, especially women.

I'm looking forward to seeing your completed butcherblock counter, as well as your kitchen. You deserve some blessings!

    Bookmark   December 3, 2011 at 7:55PM
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lee676

If this has to happen, be glad you are in DC or MD - some state laws are even more brutal in your situation. I would never get married in a community property state (actually, I wouldn't anywhere else either, but that's a story for another time).

Sorry this is happening to you.

    Bookmark   December 8, 2011 at 4:26AM
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antiquesilver

Glad to hear of your good fortune on this - it sounds like you deserve it!

    Bookmark   December 14, 2011 at 3:08PM
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lavender_lass

Christine- That's great news! At least it's much better than it was...and you have a great attitude :)

    Bookmark   December 19, 2011 at 6:58PM
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kaysd

Christine -- I am very happy to hear that part of the burden has been lifted for you. I am always impressed with your positive, can-do attitude.

Please talk to a qualified tax professional about your 2012 taxes. While cancellation of debt (COD) income is generally taxable, there are exceptions. The following is from the IRS website:

"Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.

Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.

Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.

Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.

Non-recourse loans: A non-recourse loan is a loan for which the lender�s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences."

These links will give you some basic information:

http://www.irs.gov/individuals/article/0,,id=179414,00.html

http://en.wikipedia.org/wiki/Cancellation_of_Debt_(COD)_Income

http://www.irs.gov/pub/irs-pdf/p4681.pdf

Here is a link that might be useful: IRS Pub 4681

    Bookmark   March 14, 2012 at 5:45PM
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blfenton

What a great week you are having, the debt-forgiveness and the great molding you found yesterday. Good on ya'!

    Bookmark   March 24, 2012 at 3:03PM
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blfenton

Sorry- didn't notice the date. I was in the wrong conversation forum. But still - thrilled for you.

    Bookmark   March 24, 2012 at 3:04PM
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CEFreeman

No worries. :)

I appreciate everyones enthusiasm for me and the helpful tax law. I read and read the IRS site, so I'd seen these. So far, I qualify.

The molding? Gaw-geous. I'm so excited.

    Bookmark   March 24, 2012 at 3:08PM
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kswl2

CEF, I am in awe of your determination to forge ahead in the face of what most people would consider insurmountable problems. The fact that you are continuing with your renovation is a testament to your character and force of will. I admire you greatly--- and while i wish you very good luck, you have already proved that your own perseverance is much stronger than any luck the universe can dole out. Hats off to you!

    Bookmark   March 24, 2012 at 9:52PM
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CEFreeman

kswl, thank you so much for your kind words.

I really feel what I deal with is insurmountable, frankly. I know I'm financially ruined. However. What does that mean in this day and age? I haven't lost my home. My cats and dogs are safe and warm (because of the HvAC I saved for), and I pay my regular, month-2-month bills and have some to continue to make my house livable and hopefully beautiful. The faith I have in the universe's balance keeps me going.

I admit, I'm more of a Hindu/Buddhist in my outlook. I think it comes from my years yoga, both as a student and a teacher. I totally believe in the wheel of Kharma. That's why I try to do the best I can in my life, right thing vs. the easy thing, and helping someone when I can. I obviously have some way negative kharma I have to work off or I wouldn't be having the backwards steps. But that's part of my faith. Gotta plug alone and do things right! :)

Perseverance. I think the universe respects that, since I have some wonderful things happen, and wonderful people come through my life. Even those I've never met, such as you folks here.

The stinkers? eh. Let 'em go. Right?!

But again, thank you for the kind words. I appreciate the support!

    Bookmark   March 24, 2012 at 11:42PM
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