My question involves bankruptcy in the state of: California
I have been attempting to help my cousin un-wind a personal and financial mess. She lives in a house the she own's in Joint Tenancy with her ex-husband. They reconnected after divorce and bought a house together. During the financial crisis, 2009 time frame, they filed bankruptcy together. Since she was using a hyphenated last name either the question was not asked or they misled the attorney that filed for them. They filed as a married couple a Chapter 13 bankruptcy. They listed all of the creditors, including the first mortgage and an equity line mortgage that they had with the same bank. The attorney's clerk listed the equity line as "unsecured" in the filing and the first mortgage stated that it would be paid outside of the bankruptcy by the debtor. The debtors were all notified and the bank holding the mortgages, 1st and equity line, never responded.
They set up a payment plan and they proceeded to send in monthly checks according to the plan to the trustee. At the end of each year the trustee would file and they would get a copy of the statement which showed payments going out to each of the creditors that had responded to the filing notice. All of the other creditors listed that did not respond showed that they were paid nothing, including the bank holding the equity line. They never received any notices from the bank, no communications from the bank at all. A year after the filing they equity line showed up on her credit report as a "bad debt - written off by the bank".
To this day the bank has not filed any kind of release to that equity line. They are now attempting to re-finance and the title company can not seem to get a release or a payoff from the bank.
I guess my questions are these: Is this entire bankruptcy filing invalid since the were not actually married? Was it a mistake to list the equity line loan as unsecured?
I know that that time period was frantic and there were lot's of filings and the bank was probably overwhelmed with defaults and they probably wrote off the 2nd because the 1st was being paid on-time.
Thanks for any comment!

