[Texasforever]

Well the new bankruptcy law probably makes it easier for the lending companies to keep the owner from full chapter 7 relief but the IRS rules have always stuck the owner with income taxes on the balance after foreclosure sale. I know several people that walked away after the housing bust in the early eighties and believe me, the IRS went after them with a vengeance. There were NO loopholes and there was no way they could file bankruptcy on the IRS.

[A CA Guy]

I remember a similar issue with people who took stock but had to hold onto it by contract for another year.

Somehow there were people a while back who lost everything that way as well.

[DCPatriot]

There were NO loopholes and there was no way they could file bankruptcy on the IRS.

I beg to differ.

If you owe federal taxes for 3 years from the date you filed, you can get them wiped out by a Chapter 7.

At least, that's the way it was prior to the changes in bankruptcy laws.