Rebuild credit after loan default

Refinancing complicates debt forgiveness

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

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. A few months later, the Internal Revenue Service changed the law regarding debt forgiveness, allowing thousands of borrowers since then to avoid paying tax on a short sale or a foreclosure proceeding otherwise known as the "cancellation of indebtedness income." According to Everett resident Rob Keasal, a partner in the Seattle accounting firm of Peterson Sullivan LLP, the indebtedness relief benefit applies...