Liability in a Foreclosure after Bankruptcy

[hoylep]

What is the name of your state? OH
We filed bankruptcy which was discharged in Jan 2002. We were behind on our house payments but came to an agreement with the mortgage company & have been making payments since then. Now, we are behind again and whenever I call the mortgage company they say "We have to advise you that although your financial responsibility was discharged thru the bankruptcy, we still hold a lien against the property." What does this mean? They are not reporting anything to our credit. As a matter of fact, the report I just pulled up shows a $0 balance and states "Pays as agreed" It is dated as being reported in 9/2002.
They have stated that they are going to start foreclosure proceedings.
Does this all mean that I can just walk away from this house without paying anything else?

 

[seniorjudge]

Q: Now, we are behind again and whenever I call the mortgage company they say "We have to advise you that although your financial responsibility was discharged thru the bankruptcy, we still hold a lien against the property." What does this mean?

A: Your debt may be discharged in bankruptcy, but the mortgage is still a lien on your land, which is to say, it needs to be cleared up before you can sell the land.

Q: They are not reporting anything to our credit. As a matter of fact, the report I just pulled up shows a $0 balance and states "Pays as agreed" It is dated as being reported in 9/2002.

A: That shows that about 2 1/2 years ago, you were paying as agreed.

Q: They have stated that they are going to start foreclosure proceedings.
Does this all mean that I can just walk away from this house without paying anything else?

A: It should since the debt itself has been discharged.


Stand by for some answers from BK lawyers (which I am NOT one of!)

 

[murphylawfamily]

What is the name of your state? OH
We filed bankruptcy which was discharged in Jan 2002. We were behind on our house payments but came to an agreement with the mortgage company & have been making payments since then. Now, we are behind again and whenever I call the mortgage company they say "We have to advise you that although your financial responsibility was discharged thru the bankruptcy, we still hold a lien against the property." What does this mean? They are not reporting anything to our credit. As a matter of fact, the report I just pulled up shows a $0 balance and states "Pays as agreed" It is dated as being reported in 9/2002.
They have stated that they are going to start foreclosure proceedings.
Does this all mean that I can just walk away from this house without paying anything else?

Yes, but look at my post. You can walk away but they will go through the foreclosure to get your deed and it will go on your CR for another 7 years from filing (I beleive). That is why we just went to see attorney but we just talked to our mortgage co. The attorney wanted us to do a deed in lieu of foreclosure but mortgage wants us to do a short sale. The attorney wanted $900 to neg. The foreclosure would post in PR next to the BK and since you stayed current like we did it would not go from date of BK but foreclosure. The mortgage co seems to want to work with us since they will not be getting anything out of the foreclosure except the house which will not gain in value. (at least ours) I would not just let it go the cost would be so much more in the future. We did not even understand that we did not reaffirm until last month.

If you don't care about CR for a few years you can stay in the house til they kick you out and you would not owe.

 

[hoylep]

OH
So, even though the debt was discharged, if they foreclose it would still go on our credit, is that correct?
If we would do a short sale does that go on our credit?

 

[seniorjudge]

OH
So, even though the debt was discharged, if they foreclose it would still go on our credit, is that correct?
If we would do a short sale does that go on our credit?

I don't know how stuff gets on a credit report.

 

[hoylep]

OH
I guess I still don't understand. Are we living here like we are paying rent? I have been making payments but they are not reporting it to my credit.
If we move out are we still responsible for the mortgage?

 

[murphylawfamily]

OH
I guess I still don't understand. Are we living here like we are paying rent? I have been making payments but they are not reporting it to my credit.
If we move out are we still responsible for the mortgage?

They are not allowed to or supposed to report because it is considered continued collection activity. Even though you don't owe for the mortgage if you just get up and leave the only way they can get the house back in Ohio is through the judicial process this is what would go on your CR in the public record area.

Our mortgage co just agreed to do a short sale and they would report the mortgage as paid not IIB. This can be put into contract. I will also have to make sure they remove payment history from prior to BK or all if possible. We had wanted to buy another house soon we really did not want to be here that long and I am not sure how lenders view a short sale although it seems from what I have read once you file chapter 7 and the house is not reaffimed they all read that TL as foreclosure. But I feel it will better to explain the mortgage history compared to foreclosure on public record.

 

[seniorjudge]

Q: Are we living here like we are paying rent?

A: I do not know. What do you mean?


Q: If we move out are we still responsible for the mortgage?

A: If the debt is discharged in bankruptcy and the land has been foreclosed upon, then you are no longer responsible for the mortgage.

 

[hoylep]

OH
I mean, since I have been paying all this time and they are not reporting it to the credit bureaus, then it has been as if we are paying rent. I guess I am totally confused. I thought we had reaffirmed the house with the bankruptcy, but I guess that is not the case, correct? I can't even talk to our lawyer since he is no longer in public practice! What a mess. I just don't know what to do.

 

[seniorjudge]

OH
I mean, since I have been paying all this time and they are not reporting it to the credit bureaus, then it has been as if we are paying rent. I guess I am totally confused. I thought we had reaffirmed the house with the bankruptcy, but I guess that is not the case, correct? I can't even talk to our lawyer since he is no longer in public practice! What a mess. I just don't know what to do.

I don't know anything about bankruptcy law, so I would have no idea if you have reaffirmed or not.

 

[hoylep]

Thank you murphylawfamily, you have been some help. Sorry to hear you have had to deal with almost the same issues. Best of luck.

 

[seniorjudge]

Thank you murphylawfamily, you have been some help. Sorry to hear you have had to deal with almost the same issues. Best of luck.

Post this in the bankruptcy forum with a link to this thread.

Tell them we sent you so you do not get a nastygram for doubleposting.

 

[hoylep]

I'm new at this. I don't have a browse button at the bottom of the new post screen. How do I post a link to this thread?

 

[seniorjudge]

I'm new at this. I don't have a browse button at the bottom of the new post screen. How do I post a link to this thread?

Copy the address from your browser (i.e., the address of the thread you are looking at right now). Start a new thread. Paste this address in to your new thread.

 

[HomeGuru]

Copy the address from your browser (i.e., the address of the thread you are looking at right now). Start a new thread. Paste this address in to your new thread.

**A: instead of paste would Elmer's glue work the same?