In trouble in Hemet, CA: Our Story

[Candyman]

Hello,

My name is Don. I am 34 years old, been married for 16 years, and am the father of two. Up until October, 2007 I was a Long Distance Truck Driver, but unfortunately suffered a permanent injury to my low back while on the job to which I significant disk, and soft muscle tissue damage which causes my back to swell up, and pinch my sciatic nerve, causing severe pain, and cutting off a great deal of feeling to my legs, and feet, and forcing me to require the use of a cane, and wheelchair for the rest of my life.

After I got hurt, Work Comp kicked in with the maximum 60 % of my income, but after two months they cut my benefits by30% without any reason, and then quit returning any calls, or communication so I obtained a Lawyer at which time they cut my Work Comp payments all together. After 5 months of fighting, and living off of Temp State Disability, we found out that at that time, my Case Worker had quit, and my file had been misplaced! We now are back on track, but this incident forced us into a situation where we had become 7 months late on our Mortgage! Our Mortgage Holder is Ocwen, and I stayed in contact all the way through, wrote a letter explaining our situation, and tryed everything I could think of to try to save our Home. We eventually went into Foreclosure, and came down to within two days of going to Auction when Ocwen came up with a last ditch effort Loan Modification for us which ultimataly saved us form losing our Home!

At the time, we owed approximatally $14000.00, and it was explained to me that the Loan Modification called for a down payment of $4047.00, and two payments of 1045.16 under a Trial Period. I was told that the Loan Modification was a new program in which the Loan could be re-structured in a way to obsorb the dept owed, cut my payment down to where we could afford it with our limited fixed income, and bring everything up to date. When I recieved the Loan Modification Agreement, I noticed that they had knocked off a point on our interest rate, along with a large portion of our Dept, and under the conditions, it stated that "Any Payments due for Taxes, or Insurance will be Your responsibility under the Terms of this agreement". We have always had our Tax, and Insurance Impounded, and so I asked specifically about this to the Representative handling my Loan as a precaution. They explained that the Taxes mentioned pretained to the "Down Payment, and two additional Payments per the Loan Agreement, and would come out of our Escrow Acoount, so any and all Taxes will be paid up to date automatically". So, I signed the agreement, everything fell into place, and I was able to concentrate on my Medical Problems.

Then, I recieved my 1099, and went to do my Taxes, and found out that in addition to the Work Comp Payments I have been recieving, I now also have $144,298.96 in Canceled Dept that is considered income, and now I owe the IRS 25% of that in unpaid Taxes.

So I am now I am unable to work, on a fixed limited income awaiting long term medical care, have gone through our savings to try to keep our Home, have no extra means of income, and now owe a huge amount in Taxes that I have no means of paying!

This is my first time being involved in this type of a situation, and had no idea of how Dept Cancelation worked, and was even told after I questioned it that it was covered.

Now I have been instructed by my Tax Preparer to make an itemized list of all of my dept, and they will send it in a package by mail to the IRS, and hopefully they will review it, and maybe be able to knock some of our Taxes Owed down, but even that is not a sure thing.

Now I am not sure what I should, or can do! If I should go ahead and look into Bankruptcy as we had planned to do before we wound up with this Loan Modification, or what our alternatives are, or?

If anyone might have some advise for us, we would greatly appreciate anything! I am trying my best to keep our Home together, and try to make the right decisions, and just when it seams we are on the right track, we are right back to square one all over again!

I thank you for taking the time to read our Story, and thank you in advance for any, and all advice for us in this situation!

Sincerely,

Don

[Moe Bedard]

Hi Don,


Welcome to the forum and thank you for joining...............

The best thing that you can do in this situation, is to sit down with a bk attorney and have them go over the options that you have.......the consultation on a bk is usually free...............and then make the decision of what to do next from there...........this way you will have a better understanding of what can and can't be done.

[Candyman]

Hey *** Damiano,

Thank you for your reply! I sure do appreciate it! I am going to consult with a BK Attorney in the morning, and weight our options.

Don

[tryingtostay]

You are definately not alone on this forum, Don. There are a lot of local Inland Empire people here.

Make sure you check into the Mortgage Debt Relief Law.
This is the CA link: Mortgage Forgiveness Debt Relief Law

There is a Federal link at the bottom of the page.

I'd still meet with an attorney, but definately ask if this applies to your situation. If Ocwen is your only loan holder, you may be in luck. Get a good CPA this year to do your taxes, too.

[Candyman]

Hey tryingtostay,

I thank you for your reply, and for the information! I talked to two different Attorneys today here in Hemet, and they both backed said that any IRS Dept has to be at least 3 years old to qualify under Bankruptcy Law, so that thought is pretty much done.

My Tax Preparer had originally asked me to make an itemized list of all of my assets from my House, car, furniture, etc, and then right a letter explaining how my injury on the job resulted in our defaulting on our loan, which resulted in our Loan Modification, and ending up with our Canceled Dept. Also to be included is my limited Income from Work Comp, and State Disability for 2008, itemized budget, and Doctor's Reports. I was told then they would look it all over, and if all looked good, then they would submit it by mail, and go from their.

I have all of the above information ready to go, and will also print out all of the information on The Dept Relief Act, and take it with me as well!

I am hoping that something works out, or that the IRS will see that I am now permanently disabled do to my Injuries, and even with a combined effort of Work Comp, State Disability, and my Wife working part time, we have just enough money to cover a House Payment, One Car, bare minimum utilities, and keep $90 per week in food for my Wife, myself, our 13 year old Daughter, and 14 year old Son! We are stretched as far as we can go to keep afloat, and on average come down to less than $10 in the bank after everything is payed.

I tell you, back once upon a time, I had no education, dropped out of High School my Softmore Year, and married my Wife when I just turned 17, had my Daughter when I was 18, and my Son at 19. My Dad was a Truck Driver, and helped me go through Truck Driver School, and got me my first long haul job running Team Driving coast to coast. Sure I was gone alot, but for having no education, their is not too many Jobs I know that will pay between $35,000 to $50,000 a year, so I couldnt complain! My Dad retired later on, and I moved my way up the ladder to land one of the best Jobs I could have ever hoped driving for one of the biggest, and best LTL Comanies in the Country! That got me the House, Cars, College Funds set for the Kids, and we were doing well!

Then, one night in April, 2004, I got called for dispatch as usual, but my Partner was sick so they paired me up with another Driver for my regular Runs for the week which was pretty normal. I met the guy, who was ver nice, and said he had been with the Company eight yeears so he had a goo long history with everything, and looked good to go. I remember he took the first shift at 10:00 PM, and I went to the bunk to catch some sleep before my shift.

I remember I was having trouble sleeping, and kept checking my clock for some reason. At about 12:00 PM midnight, I felt my Partner jerk the wheel. Knowing since we were pulling a set of Doubles (Two 28' Trailers) that by jerking the wheel that hard was not good as it will cause it to whip, so I got up, opened the curtain between the Sleeper, and drivers seat of the Truck, and asked if he was ok. At that pont I kind of remember seeing my Partner either jump, or fall out of the Trck on the drivers side, then feeling the truck roll over, busting glass, asphalt screaching, dust, smoke, gravel, and then nothing.

The Official Repot said we were traveling at 65 MPH when the Driver accidentally fell asleep at the wheel at which point the Driver eledgedly attempted to jump from the Truck before rolling over, sliding approximattaly 300' before comeing to rest down a 10' embankment. The Driver was found crushed under the lead trailer, and was killed instantly. Because I had been sitting up between the Sleeper, and the two front seats, I was just by chance saved as I was exactly in the middle of the Truck Cab during impact. I was thrown forward head first into the dash board, and recieved head, and spine Trauma, but survived, and am very thankful for that each, and every day!

After three years of Rehab, countless Doctors, a lot of hard work, and a little faith, I got myself back to the point where I could drive a little on a Short Haul basis. I also wanted to get back into a Truck as I had so many nightmares, and was so afraid of Trucks that I really wanted to face my fears head on, and in January 2007, I did it! I got over my fears, and was out on the road again, and looking forward to try to re-build my life again, and not have to struggle ever again!

Until one afternoon in October 2007, when I was delivering up in Central California to a one man shop who had no loading doc. I had to roll several pallets weighing 2000 LBS a piece so that he could offload them with a forklift I was doing great until I had one wrong move while moving the third pallet from the end. I felt a sharp pain go up my spine, and that was it. I heniated two disks simotaniously, and the right side of my back swelled up like a ballon, pinching my sciatic nearve in the process which cut off most of the feeling to both legs, and feet!

I have had three Nuerosurgens say that the damage is permanant, and cannot be repaired, or corrected. I can get around a little with a cane, but with my legs getting numb, I have a lot of balance issues so I also require a wheelchair to get around most of the time. The Doctor's are also working on setting up permanant long term Medical Care consisting of regular Steroid Injections for life to help keep the muscles from cripling me as much as they can, and heavy pain meds, and muscle relaxants which are expected to cause eventual problems with my Kidneys, and Liver which will require care somewhere down the road.

After the Medical Care is set up, we do plan to settle for a large settlment, but because I will require Medical Care for life, the settlement will be an annuity of basically a percentage of the $2300 I am getting from Work Comp for life. Though that would be a good settlment over time, it means we are going to be strugling just as we are now virtually forever!

And then, after coming down to three days from the Bank auctioning off our Home, we catch a break, they re-work our loan, and cut our payment almost in half so we can save the one thing I worked so hard to be able to provide for my Family, only to find out that one gleem of sunshine, that we might be ok, turns comes back to bite us as owing the IRS over $43,000 or more in taxes because of canceled dept on the very Loan Modification that had saved us! We even lost the estimated $4300 that my Wife would have got back if it had'nt been for this mess, which would have caught us up a little, and been such a huge help!

This is on top of someone steeling my identitiy in December, and debiting my Bank Account of $800 of my Disability Money, to which we had to get the Car Loan people to defer two payments to help out! We wound up changing accounts, and got it stopped, and are still working on the rest of that mess.

I guess the point is, no matter what Life throws at you, all you can do is keep on working on it, and never give up! Its been a really rotton year, but we are still here, and still working on it one day at a time, hoping one dat things might get just a little easier!

Where is Extreame Makeover Home Edition when you need them? LOL

Anyways, I thank you so much for your help, and replies! I big time appreciate everything, and will keep you updated as we go along! We are going to see our Tax Guy on Monday night, and go from their!

Take care,

Don