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Foreclosure after bankruptcy - we want to surrender our house.
Anonymous2 views4 answers
We filed for bankruptcy last year in August, and our house was part of the debts we wanted to discharge. We attempted to turn over the keys to our mortgage company. They, however, insisted that we had to go through foreclosure. Are we supposed to reply, or just let it go? Do we need to go to court, since the loan was supposedly discharged in the bankruptcy?
Even thouogh you want to surrender your house, by law, the mortgage company must go through the foreclosure process as it exists under state laws, in order to take back the property. In some states, foreclosure involves a summons & complaint, while in other states, foreclosure simply involves providing you with notice that a sale of your property will take place on the courthouse steps.
My suggestion would be to contact the attorney for the lender & ask if he is aware of your bankruptcy discharge. If you are at all concerned, file a copy of your bankruptcy discharge with the court hearing the foreclosure sale.
If you have already left the property, you may ask the lender's attorney if you can sign a deed in lieu of foreclosure or stipulate to a judgment to expedite the foreclosure.
If you are still in the property, why not take advantage of the free rent? Even the lender will benefit from you staying in the house up until the time they take over ownership of the property. An empty house is just an invitation to vandals and neighborhood blight.
I live in Vegas - I know these things! Hope this perspective helps!
I agree with the above. You should live in the house as long as you can rent free before the Sheriff asks you to leave. You just got out of bankruptcy; the harm to your credit is already done and the foreclosure is non-recourse. Just make sure you keep paying the utilities because they could be shut off.
First of all, why not stay in your home as long as possible? In Ohio, that can be more than 1 year.
Second, check the foreclosure complaint very carefully. Check it to see if the bank demands any money judgment from you. If it did, it is in violation of your discharge. That is actionable and you should find an attorney to file a claim against them.
If the foreclosure complaint only asks for foreclosure and possession of the house, then the bank has filed correctly. No reason that you can't stay there 'til the end though. You'll need a Plan B for getting a new place. Be sure to save as much as you can while you aren't paying a mortgage.
Finally; you could file an "answer" to the complaint. That contests the case and slows things down considerably. If you look on this site, you will find instructions about answering complaints. Good luck.
Ok, this may get a little deep but stick with me. When you purchase a home you have to sign many documents, but the most important are the mortgage (security interest) and a promissory note (debt instrument). The Note states that you owe money and the mortgage or lien states that the house or property is the security for the loan. A bankruptcy will only discharge the debt. Liens survive bankruptcy. So when you received your discharge, your discharge only killed the promissory note (discharged the debt), the mortgage company's lien survived for the mortgage company to foreclose upon. This protects the secured creditor from losing his collateral.
Since I live in a Judicial Foreclosure state and have to deal with BAC Home Loan Servicing, we are noticing that they are taking their sweet time foreclosing, prefering to harass the debtor when they know they shouldn't be. Be careful and don't put up with any of their bologna. Good Luck
The same thing
