Question about Line of Credit that was forgiven by Chase and the Mortgage Forgiveness Act
If Chase sent me a letter stating my line of credit debt was forgiven but later I find out that Chase sold the piece of debt to a 3rd Party Collection Agency, it almost seems like my debt still exists and wasn’t forgiven in any way. If that really is the case and I get calls from a Collection agency, would Chase still send me a tax liability for this supposedly forgiven piece of debt? I ask this because I want to be safe and I’ve been reading in the news that the Mortgage Forgiveness Act protects homeowners who used debt to purchase a home up to $2m for a primary residence that they’d be protected under mortgage reduction so i should be safe from a tax liability right? My Line of Credit was solely used for the purchase of my home as Acquisition Debt
I would definitely contact an attorney with respect to this issue as soon as possible. The 3rd party collection agent may be in serious violation of the Fair Debt Collection Practices Act (“FDCPA”) and you may be entitled to damages relating to the collection agents unlawful attempt to collect on a debt that is seemingly no longer existent.
It is very important to remember that you have 30 days to send the collection agent a Validation of Debt Demand to being to establish a FDCPA action.