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  1. #1
    Join Date
    Jul 2006
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    2

    Exclamation Foreclosure after Bankruptcy Discharge

    My husband and I filed bankruptcy last October and it was discharged in February 06. At the time we filed, we were led to believe by our mortgage company that as soon as all of our other debts were off the table we would be able to refinance our house to lower our payments and get out of the adjustable rate mortgage that we were in. Well, after all was said and done they won't nor will anyone else because the housing values in our area have decreased and we don't have enough equity. As a result, our mortgage payment was raised and raised and we are in the foreclosure process.

    We never signed anything reaffirming the debt during the bankruptcy - but it was paid current at the time of the bankruptcy hearing. No payments have been made since. We are working with the lender on a possible short sale, but have not had any offers and the foreclosure sale date is Aug 23rd. My question is -- if it does foreclose and not sell, would we be liable for the difference between the full payoff amount and the sale price? Or does the bankruptcy protect us from that?

    Any help is appreciated. This has been a source of losing a lot of sleep.

    Thank you!!

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Foreclosure after Bankruptcy Discharge

    Were you represented in the bankruptcy proceedings? You should check the status of the mortgage with your lawyer. For example, while you may not have signed anything to reaffirm the debt, you may not have even petitioned for its discharge. I would guess that is the case, as otherwise the bank would have sought to recover its interest in the property at that time, but I can't be sure what happened.

    The bankruptcy is over. If you incur a new obligation as a result of foreclosure and the sale of the property, it won't be affected by the bankruptcy.

  3. #3
    Join Date
    Jul 2006
    Posts
    2

    Default Re: Foreclosure after Bankruptcy Discharge

    Thank you for the information.

    Yes, we did have a lawyer, but evidently not a very good one. We saw him for about 2 hours filing the paperwork for the bankruptcy, and for about 15 minutes at the hearing (he had 5 other clients at the same time slot). Since then we've been able to talk to him once when we asked him about including the house in the foreclosure (before discharge). He told us he would be happy to contact the mortgage company on our behalf and try to negotiate, but that we would need to pay more - which we did. He has never returned our calls since. We had to call the bankruptcy trustee to find out what it meant when the mortgage company filed a motion for relief of stay!

    Also, weren't we supposed to get an itemized list or something of the debts that were discharged? I'll call their office again today and see if I can find out some answers. In the meantime, we've already moved and are working with a wonderful realtor who is in contact with the bank and we are hoping and praying the house sells in the next month.

    Thank you again for your help and knowledge.

  4. #4
    Join Date
    Sep 2005
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    98,846

    Default Re: Foreclosure after Bankruptcy Discharge

    You petitioned for the discharge of certain debts. The debtors you identified had the opportunity to appear and challenge the discharge. The court subsequently granted an order of discharge, based upon your petition and any exclusions successfully argued by the creditors.

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