What was the mortgage forgiveness Debt Relief Act of 2007?

In response to the subprime mortgage crisis, the Mortgage Forgiveness Debt Relief Act of 2007, P.L. 110-142 (MRA), was signed into law on December 20, 2007. This act excludes from income the discharge of qualified principal residence indebtedness. Its discharge provisions are temporary and apply to discharges during 2007, 2008, and 2009.

How does debt relief help you get out of debt?

But one solution has helped millions of people nationwide to find the debt relief they need. A debt management program helps you get out of debt faster by lowering or eliminating interest charges applied to your debt. This can allow you to get out of debt faster, even though your total monthly payments may be lower.

When to apply for debt relief from foreclosure?

Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief. This provision applies to debt forgiven in calendar years 2007 through 2017.

What happens if you remove a credit card from a debt management program?

To do so, call customer support and make the request. The consequences for removing a credit card account from a debt management program are similar to those of canceling a program, though possibly not as severe. Credit counselors encourage you to put all your credit card accounts into the program.

Today, President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007, which will help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages. This Act will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive.

How often are people behind on their mortgage payments?

According to the FDIC, every three months, 250,000 new families enter into foreclosure and more than 6 in 10 homeowners delinquent in their mortgage payments are not aware of services that mortgage lenders can offer to individuals having trouble with their mortgage.

What happens when a bank forgives a portion of a mortgage?

Under current law, if the value of your house declines, and your bank or lender forgives a portion of your mortgage, the tax code treats the amount forgiven as income that can be taxed.

What happens if you cant make your mortgage payments?

A homeowner takes a mortgage out to buy their dream home, only to find out that a few years later they are unable to make their payments. Whether it is losing your job or some other financial challenge you’re not alone if you find yourself in a situation when you are no longer able to pay your mortgage.