Just curious, but did you friend pay income tax on this? Loan cancellation is taxable income. Still, even paying taxes, that is a nice little benefit.
That’s a good question, but I did not ask him, nor did he mention it. I know he had a lawyer help him at the time because they suspected that his paperwork was missing & his lawyer informed him that he had a chance of not having to pay back this loan. This was several years ago when many home loans were crashing & law firms were aggressive in helping their clients look for an out due to all this bad paperwork.
Just curious, but did you friend pay income tax on this? Loan cancellation is taxable income.
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Probably not ,,, in his case the supposed creditor could not show they owned the note ,, therefore logically they could not cancel the debt as they could not show they owned the debt. In matters like this the borrower is still “on the hook” if the rightful creditor steps up with valid documentation... If enough time has passed that the debt is no longer collectible then the borrower should file a suit to discharge the recorded lien to clear title.