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Debt and Credit Counseling

Your are required to complete a credit counseling course prior to filing bankruptcy.  There are many approved credit counseling sources available that will provide you with the necessary certificate for a nominal fee, usually between $35-$50.  DO NOT PAY MORE.

Free Bankruptcy Attorney Consultation

Debt relief is big business.  You hear expensive ads on radio and TV everyday.  Be very cautious, there is a great deal of consumer fraud associated with debt relief. 

Call an attorney before you spend any money.  I provide a free initial consultation, call me before you make any commitments.  805 987 1400  Evening and weekend appointments available.

Email Consultation,  if you can not call during normal business hours you may also ask me a question by email, or arrange a time to call me for additional information. 


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Cancellation of Debt

Generally, if you have property that is used as security for a debt and that property is taken by the lender (foreclosed) in full or partial satisfaction of the debt, you are treated as having sold the property. This may generate either a gain or a loss, and in some cases cancellation of debt (COD) income. A mortgage restructuring (such as reduction in principal), that reduced your debt may also generate COD income.

In the wake of the 2007 American housing market collapse and subsequent mortgage crisis, the U.S. Congress enacted the Mortgage Forgiveness Debt Relief Act of 2007 (P.L. 110 142) and Emergency Economic Stabilization Act of 2008 (P.L. 110-343).

These Acts include provisions under federal law that, subject to certain conditions, that allows taxpayers to exclude from their federal taxable income the discharge of debt on their principal residence (COD income) that they would otherwise have been required to report (2007 through 2012). The special federal rules relating to qualified principal residence apply to debt reduced through mortgage restructuring, as well as to mortgage debt forgiven in connection with a foreclosure.

Debt Relief

The Bankruptcy code, amended by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, places extensive requirements on debt relief agencies and subjects those who do not comply with substantial penalties.

What is a "debt relief agency"?

11 USC 101 (12A) The term “debt relief agency” means any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration,

11 USC § 101. Definitions