San Bernardino Deed in Lieu

If you aren’t able to find a buyer, and you have a decent amount of equity in your home, you may be able to convince your bank to accept a deed in lieu of foreclosure. A deed in lieu, as it is often called, allows you to turn over the deed to your house, and in exchange, the bank or mortgage lender will take possession of the house without trying to collect what you owe. This can be beneficial if you are struggling to make your mortgage payments, but can otherwise pay off your bills just fine. It is also beneficial if you are trying to avoid San Bernardino foreclosure, but have a financial setback that makes a loan modification impossible.

Just as in a short sale, if your bank accepts a deed in lieu, you will likely be subject to a forgiveness tax on any monies that you would have otherwise been required to pay. That means that if you give the home back and you still owe $50,000 on your mortgage, that $50,000 will be taxed by the government as if it is income. This is because the government treats any forgiven debt as though it is money that you earned, rather than as a debt you do not have to repay.

If you are subject to a forgiveness tax, filing for a San Bernardino bankruptcy in conjunction with your deed in lieu can help to minimize or eliminate the tax obligation altogether. The laws surrounding the conveyance of property from one entity to another are complicated, and it can be difficult to understand what you may be liable to pay. Our team of reliable, experienced San Bernardino County Bankruptcy Attorneys can help you put the pieces into place and get a better overall understanding of how the bankruptcy process can save you money and help you get a fresh financial start.

If you are considering proceeding with a deed in lieu in order to avoid a San Bernardino foreclosure, talk to us today. We will provide you with solid legal advice that will let you know whether or not you will need to file for bankruptcy in order to protect your assets and emerge financially solvent. Contact our premier San Bernardino County Bankruptcy Law Firm today and arrange for a free initial San Bernardino Bankruptcy case evaluation as soon as possible. Don’t wait – the sooner you contact our firm, the better informed you will be when making these important decisions.