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[Q=stanleyf5] I mean if he negotiates with his creditors to pay a portion of the debt and the creditors forgive the rest without him filing bankruptcy. If he files bankruptcy there will be no income tax on the forgiven debt. Stan.[/Q] Stan wouldn't that mean that all home owners who had the home loans re-worked and changed to todays value fall under this rule too? I'm talking about the upside down loans where the owners owe more than todays worth! PHILL12