Rebuild credit after loan default

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Our four children and their academic calendars have guided me through time in four-year blocks. For example: "Charley was a sophomore when that happened. He’s been out for two years so it must have been four years ago."

That’s how I remembered my friend’s situation while visiting at a recent high-school game. It’s been four years since the man lost his longtime job, sold his house at a loss and then had to pay tax on the mortgage amount forgiven by the bank.

The net amount forgiven, $15,000, showed up as taxable income on the homeowner’s tax return.