What's this all about? We surrendered our home in Ch.7 BK, discharged 12/02. Now we're getting letters from 1st mortgage company saying they are proceeding with foreclosure. We already gave the house back to them!! I'm assuming this will FURTHER damage our credit. Is there anything we can do? What is a Deed in Lieu of Foreclosure, and is it too late for us to do that? Our attorney is worthless - thanks for your help!
I'm assuming this will FURTHER damage our credit. Bev ============== Not much doubt about it. The END ************************* LB 59
If you surrendered your home, but did not get a discharge of the mortgage debt then they will be able to get a "definency judgment." I have already seen people surrender assets in bankruptcy, then either do not get the debt discharged or they reaffirm the debt. Look at the order of discharge and see if the mortgage debt is listed as being discharged. Hopefully, you did not reaffirm the debt or your lawyer did not forget to make sure the debt was discharged after you surrendered the home.
I'd check out section 524 (maybe it's 528) of the bankruptcy code or have an attorney do it for you. What they are now doing could end up being an action that is in contempt of the bankruptcy court. If you have a remedy it will be under the bankruptcy court and no where else that I know of. That much has been decided by the courts long ago. Whether that would apply in this instant situtation or not I do not know but it seems to me that it might.
Not knowing the specific details I can't imagine that a BK lawyer wouldn't have protected you from that. If they have, and the mortgage company is still proceeding, then you can (and should) have your BK lawyer pursue them for damages. If, on the other hand, it was overlooked, I'm not sure. Deed in Lieu of Forclosure is where you give the mortgage company the deed back voluentarily, rather then forcing them to forclose. I'm told it looks better on a credit report than a straight forclosure, but still isn't good. Another option is to find a buyer, quickly, that wants a good deal (and is approved), and beg the mortgage company to short-sell the house. Short-selling means getting the mortgage company to sell the house for less than what's on the paper. Sometimes you can do it, up to about 80% of the paper value. It obviously requires a ready buyer, immediately. It's better for the mortgage company, and better for you, but still damaging.
If the mortgage co gets a deficiency judgement does that mean the owne rthat gave up the house is liable for any differnce between what the mortgage co sells it for and what was owed at time of default? pb
On our credit report, the first mortgage company says "included in bankruptcy." The 2nd mortgage company says "included in bankruptcy." Does that help us any?? Thanks for all your replies!
OK, here's what it says on the back of the "Discharge of Debtor" from the Court - Collection of Discharged Debts Prohibited..... However, a creditor may have the right to enforce a valid lien, such as a mortgage...against the debtor's property after the BK, IF THAT LIEN WAS NOT AVOIDED OR ELIMINATED IN THE BANKRUPTCY CASE." Debts that are Discharged... The CH7 discharge order eliminates a debtor's legal obliation to pay a debt that was discharged... So, where do we stand now? Does this mean that they can't foreclose or something? Or if they do, can the foreclosure go on our credit report too??
When I talked to a BK attorney, she said that the foreclosure would appear on our credit. However, she also said that BK can protect them from foreclosing on the house if it was our primary residence, etc. If the house is your primary residence, I think they generally make the case that you'll be homeless, and try and come up with a deal. Did you agree to surrender the house or did you try to keep it? Can you afford to pay for it?
One other note, our lawyer told us that in any case where there is collateral involved (secured debt), the collateral may be collected after BK. This implies that cars, etc. where a loan is made, will be repossesed after BK (after the protection period...and NO sooner). The same is true for properties (they are secured debt), so if there wasn't a specific deal made, then the bank will take the house, because you discharged the debt and they're entitled to their collateral.
One final note (I see you said you're lawyer is worthless at the top). Here is a web link for the attorney I was going to use (ultimately, I decided that BK was not going to help my situation, but it wasn't because she was doing a bad job). She's probably not in your state, but for a couple of bucks (or maybe even free) she may be able to give you some advice. http://www.patricklawinfo.net/
Re: Re: Foreclosure after surrendering home Then the bank will take the house, because you discharged the debt and they're entitled to their collateral ihcfan ================= The way I read the original post the bank has already taken the posters house and they are trying to take it again. No way can you make two houses out of one.LOL The END ************************* LB 59
Re: Re: Foreclosure after surrendering home Thanks for your input. We did surrender the house. We are currently renting an apartment. Bev ================= So how they gonna take it from you when they all ready have it?
Re: Re: Foreclosure after surrendering home , Then the bank will take the house, because you discharged the debt and they're entitled to their collateral ihcfan ================= The way I read the original post the bank has already taken the posters house and what they are trying to do now is take it from the poster again. No way can you make two housed out of one.LOL The END ************************* LB 59
Re: Re: Foreclosure after surrendering home THEY WANT THE HOUSE AND THE BALANCE OF THE LOAN THAT IS NOT OFF-SET BY THE RE-SALE OF THE HOUSE...
Re: Re: Foreclosure after surrendering home There just might be a little legal problem or two with that.
