trudmama asked:


If someone is potentially facing a short sale but still has 30k left on an equity line, would it be possible for that person to use the 30k to pay off student loans and other debts with the equity line if they know they are already facing a short sale or foreclosure? Due to the Mortgage Forgiveness Debt Relief Act that was just enacted, a person would no longer have to pay tax on the debt forgiveness, so therefore the additional money used from the equity line would not be taxed. Would it be smart to pay off student loans with this money if you already knew you would lose the house? What about using that $$ and then foreclosing?

Ann

Chuck Z asked:


Recently, there was talk that the IRS was changing its rules so that debt relief experienced by persons who lost their homes to foreclosure would no longer be taxed. What’s the status on this rule change?

Caffeinated Content