Forgive Us Our Debts

Posted Feb 3rd 2008 8:44PM by Deborah Owens

Forgive Us our Debts In 1990 my husband came home and said, "We're moving to Baltimore." We had moved to Northern California three years earlier, purchased a home and were expecting our second child. I looked at him and said, "Are you out of your mind?" Shortly after that announcement, we packed our belongings and put the house up for sale.

Here it is 15 years later and I can still remember how our house lingered on the market for almost a year without even a nibble. The housing market had tanked and we eventually settled with the bank with a short sale, selling the house for less than the mortgage. The bank forgave us the difference in the amount we owed and unfortunately for us it was considered a taxable gain. Talk about adding insult to injury.

The recent downturn in the housing market feels like deja vu to me. But you can thank your lucky stars for the Mortgage Relief Debt Act of 2007. This act allows individuals to exclude any discharges of indebtedness from a principal residence. Someone finally recognized that it makes no sense to kick a person when they are already financially unstable.

Make sure your tax preparer is aware of this new development because the act was signed into law December 14, 2007 and applies to home sales from 2006 to 2010.

The Congress moved quickly on this bill, but how long will it take them to to approve an economic stimulus?

www.deborahowens.com

H.R. 3648: Mortgage Forgiveness Debt Relief Act of 2007

Do I Qualify for Mortgage Debt Relief

Reader Comments

1. Good for all of us.

Emmett at 8:03AM on Feb 9th 2008

2. They finally got it right

topaz at 10:09AM on Feb 9th 2008

3. if the goverment,was concern about,the american people.after 9/11.

our goverment would have put ,into law.that every american citizen,show proof of citizenship.an i mean a door too door search.everyone's place of resident's ,need's to be registered.with a sticker displayed in your window.an vehicle's.

this would get reed of alot of the illegal's,an sleeper cell's in our counrty.an take away all visa's. an if you are here illegally.you will do a mandatory 5 year sentence,for first offence.second ,an third time offender's 10 yr's ,20 yr's.an so on.

until this is done ,properly.no american's will be save.our bordors are not save.

meechie at 10:56PM on Feb 9th 2008

4. meechie,are you an American Indian?If not you are still illegale in America.How many years,you are willing to go to jail?When your family came to America they were as illegale as this people.If you are an American Indian I agree all of them need to take their boat back to where they came from.(including the Mayflower)you are so ignorant.....

Annette Bernardin at 11:22PM on Feb 9th 2008

5. This is deja vu. The only moderately intelligent thing to do now with your house is to remoced it yourself.

Polywood Funiture at 5:08PM on Mar 31st 2008

6. Jubilee Year

OK. Let's try something revolutionary. A Jubilee Year. What if everyone was forgiven of all their debts this year as a surprise? What if the US Government decided that everyone's debts as of 04/15/08 were taken on by the government and Congress put it on the books that at some point undetermined in 2058 or 2059 this would happen again?

But what if consumers at the volume of 10%, 20%, 50%, or 80% just decided not to pay their debts this year? What if everyone refused to pay - you know - just sit down at the front of the bus and say, "I'm tired. I've been working all day to pay a fat banker; I'm just sitting down right here!?

What would happen to our economy? The big question is this: Who would have money and who would lose money? What if we all decided to do this as of April 15th? If we need to find the bottom of the market, this may be the way to do it!

Ken Delan at 6:43PM on Apr 12th 2008

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Forgive Us Our Debts

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