Debt Consolidation & Iowa Credit Counseling

A reliable and efficient debt consolidation program may help you in taking the right step towards becoming debt-free.

If you feel you are overwhelmed with credit card debt, tired of harassing phone calls or just like the convenience of one monthly payment, a credit counseling program may help you.

Credit card consolidation and debt management program can help you financially by offering you a choice of solutions, custom tailored to fit your financial needs.

A credit counselor will speak to your creditors and negotiate to: 

• Stop any harassing creditor phone calls.

• Reduce your monthly payments.

• Consolidate all of your unsecured credit card debt into one simple monthly payment.  You may even be able to choose what day of the month it is due.

• Reduce the number of years to pay off your debt dramatically.

Financial Articles Related To Iowa

Tax issues after foreclosure in Iowa

Beginning of the economic crisis in 2007, nation is seeing record level of foreclosures. It is because the mortgage lenders are tightening credit after a liberal period of lending and also with increase in interest rates of adjustable rate mortgages and decline of home values letting the home owners either to walk away form home and leaving the home to foreclose by banks or make a short sale leads to more number of foreclosures.

The actual foreclosure process begins when the home owner falls behind the payments for consecutive 3 months and no initiative taken by the home owner to come current on the mortgage.

Iowa foreclosures are of two types �recourse� or �non-recourse�. If the debt is recourse, then the debtor is liable for the debt taken. If the debt is non recourse type then the debt is only secured by the underlying property and therefore the debtor is not personally liable for the balance of debt.

To know what type of debt you are carrying, go through the loan agreement or best is to consult your attorney to determine the debt type. In Iowa the mortgages taken to purchase the homes are both recourse and non recourse.

The actual tax issues come into picture when a non recourse mortgage is foreclosed, as the property is treated as sold and the remaining balance of debt is forgiven as the debtor is not responsible for the debt balance. This forgiven amount is treated as gain by the internal revenue service and requires form 1099 from your old mortgage company.

What is this form 1099? It is form commonly used to report income to Internal Revenue Service. Unlike, where taxes are taken out of W2, 1099 doesn�t show any taxes that are taken out of the income that is declared in the form. If a person who gets this form has to pay taxes on the amount of money that is reported as an income, that he/she owes. If 1099 is issued to you, then internal revenue service will be looking for your tax return to make sure that you had paid taxes in full for the amount that you owe.

Imagine what is the condition of the person who losses the home and in turn gets letter from the internal revenue service to find a 1099 from your mortgage company for the debt cancelled after foreclosure. This is what happens to many people who has lost the home to foreclosure and is completely legal.

To overcome this issue of the home owner and help the home owners who had lost their home due to foreclosure, congress had passed the mortgage forgiveness debt relief act of 2007 that temporarily help the home owners by providing a way to exclude the forgiven mortgage debt which is treated as income by IRS which they will get from their mortgage company after foreclosure. In other words, this act forgives the home owners who lost their home to foreclosure to pay taxes on the mortgage debt forgiven.

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