questions & answers

Question: Hoping I picked the right category. In January of this year (2017) I received a 1099-C from the bank cancelation of debt from a Home Equity Line. Does the bank need to release the lien or deed that was recorded when the HEL was established? How do I know they truely forgave the debt or if there is still some backdoor for them to collect should I sell or refi the home? I only received the 1099-C nothing else. And at the Maricopa recorders office no release was recorded. What do I need to do to have them release it. Is there a time frame that the bank is required to file a release?

Answer: If you received only a Form 1099-C for IRS tax-reporting purposes – the reason behind the debt cancellation will be indicated by a code in Box 6 (“Identifiable event”) – then you may wish to contact the lender, because you may still owe the lender money. If you would like to discuss your specific situation with an attorney, there are links to free or low-cost legal assistance on this website.