Some homeowners in Virginia may find themselves facing a hefty bill after losing a tax break on forgiven mortgage debt. When a home is foreclosed upon or short sold, a portion of mortgage debt is also forgiven. For 10 years, people could exclude up to $2 million of forgiven mortgage debt from their taxable income. As a result, people who were already facing financial hard times could avoid even more debt for an unrepayable mortgage. However, this tax break was temporary, and it expired at the end of 2017. As a result, people with this kind of forgiven mortgage debt may be looking at a high tax burden.
Rising health care expenses, longer lives, fewer pensions and low savings have begun to drive more older adults in Virginia to file for bankruptcy. From 1991 to 2016, data collected by the Consumer Bankruptcy Project showed a 12% rise in people 65 and older who need debt relief. As of 2016, 1 in 7 bankruptcy filers fell into this age group.
Virginia residents and others who have credit card debt may find it easier to pay off by converting those balances into a personal loan. Personal loans can come with an interest rate of about 5% for those who have good credit while the average credit card interest rate is about 18%. Another benefit for borrowers is that there is generally no need to use collateral to secure a personal loan.
Once the dust of your divorce has settled, you will be ready to move forward in your new life but may find yourself hindered by certain unexpected financial challenges. While divorce will certainly require some adjustment, you could be left with insurmountable financial obligations and insufficient income.