1099 on HELOC rental properties

Posted by jack in MI on November 23, 2008 at 09:22:12:

Situation:
Approx. 6 years ago me and my business partner bought 7 rental properties with cash. Fixed them up and took out mortgages on 2 (both he and I signed for the mortgages), and HELOCs on the other 5. Our intent was to resell or rent out. Well, neither worked out and my partner had other financial troubles and filed bankruptcy early 2008. This left me on the hook to keep up trying to make payments (we had the properties listed for sale for over 14 months), real estate market plummeted, and we stopped making payments on the properties. Tried to work out deals with banks with no luck (though now they seem to be cutting deals with everyone else).
My questions are, how does the bank issue 1099's on 3 of the properties that have been sold through foreclosure? Will they issue me a 1099 as well as him, or just to me? If they issue a 1099 to only me for the full amount of each forgiven debt, can I then turn around and issue my partner a 1099 for half of the amount of my 1099?
Also, the other 4 properties (all HELOCs) have not been sold through sheriff sale. Why wouldn't the banks that hold the HELOCs sell to get a portion back?
By the way, the lenders are as follow:
2 mortgaged properties that were sold through foreclosure were held by Citizens Bank.
5 properties with HELOCs were through CHASE...they sold one, but haven't even completed a sheriff sale on the other 4.

Follow Ups:


Name    : 
E-Mail  : 
Subject : 

Comments: