Legal Question in Bankruptcy in Minnesota

Will we be given a 1099 on a bill for $27,400.00 and were offered a $1500 settlement on a Time Share mortgage? We agreed to purchase a Time Share in 2010 located in Las Vegas, NV. We encountered financial difficulties at the end of December 2010. At this time we notified the Time Share of this problem but were advised we were obligated to pay. We initially paid through mid 2011 but discontinued payment at this time. We now have been offered this settlement and once the $1500.00 has been paid they will send us a WDIL(Warranty Deed In Lieu) to sign and have notarized. I am now worried about a 1099 which if applicable because of this settlement, we will get hit with a large tax bill.

Asked on 10/21/14, 12:29 pm

1 Answer from Attorneys

David Kelly-952-544-6356 Kelly Law Office

I would expect that you would get a 1099 for the debt forgiveness. But I am not a tax expert. My expertise is in the field of bankruptcy. I can tell you that if the debt was discharged in bankruptcy, there would be no tax. A bankruptcy discharge is not a taxable event.

If I were you I would consult an accountant. I suppose you could also just ask the timeshare people what they intend to do in that regard, but the trouble with asking them is that they might not be trustworthy.

This response is for general information purposes only, is not legal advice, and does not create an attorney-client relationship.

Read more
Answered on 10/21/14, 1:32 pm

Related Questions & Answers

More Bankruptcy Law questions and answers in Minnesota