You’ve recently moved. You’ve found a new job, schools for the kids and a new favorite watering hole. One problem lingers…….your out of state real estate. Whether its an investment property or an old family home that didn’t sell, many people these days find themselves burdened by out of state real estate. In North Carolina, I see many clients who have moved from Florida and still own property there.
If you’ve read this blog, you’ll know that bankruptcy allows the consumer the rare advantage of being able to simply surrender a home back to the bank with no continuing obligation under the mortgage. In addition, the forgiveness of debt is not a taxable event, so you won’t have to worry about the IRS issuing a 1099. The analysis does not change just because the real estate you’re surrendering is located in a different city or state from where you’ve filed bankruptcy. For example, it is possible to surrender real estate in Florida by filing a bankruptcy case in North Carolina. However, if you have recently moved, it will be important to consult with a bankruptcy attorney to determine the proper venue for your case.