Chapter 7 Discharge Does Not Prevent Subsequent Foreclosure

A reader wrote me stating that she had filed Chapter 7 bankruptcy because a bank was suing her for the amount of her home mortgage. This was not a deficiency action. The bank sued the reader for default under the promissory note without foreclosing on the mortgage. Without foreclosure, the owner would keep her house but the bank would have a judgment against her personally. She filed Chapter 7 to stop the lawsuit. Continue reading

Does Chapter 13 Bankruptcy Preclude Mortgagee Filing Unsecured Deficiency Claims?

A potential bankruptcy client wanted to avoid a deficiency judgment from a partially first mortgage on his home. The client’s income made him ineligible to file Chapter 7 bankruptcy which would have discharged the deficiency liability in full. The client had heard that filing Chapter 13 bankruptcy could also eliminate the deficiency claim completely.
Continue reading

Don’t File Bankruptcy Just Because You Are Liable For Upside Down Mortgage

Over the past few years I have on several occasions listened to other debtor’s trustee examinations during which the debtor stated that the reason they filed Chapter 7 bankruptcy because one or mortgages was upside down and they feared a deficiency judgment. Continue reading

Mortgage Modification And Bankruptcy: HAMP Directive Protects Bankruptcy Debtors

Many people forced to file bankruptcy against unsecured debts are also trying to save their primary residence from foreclosure by negotiating mortgage modification. Many of my clients and callers are very worried that a bankruptcy could mess up their mortgage modification effort. Not true. Continue reading