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    Default Owner's Responsibility for House Seized in a Drug Case

    1. Is the owner liable to continue to make payments.
    2. Can the owner claim bankruptcy if he is financially ruined due to attorney fees, etc. - and will this alleviate him of his responsibility to pay for the house (which he no longer owns) forever?

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    Default Re: If a house is seized by the state in a criminal drug cas

    Quote Quoting Jennifer Levine
    1. Is the owner liable to continue to make payments.
    Interesting issue. The morgage continues to be a valid contract between the bank and the owner; the mortgage may have a provision permitting acceleration or foreclosure in the event of this type of circumstance. The mere seizure, though, wouldn't invalidate the owner's contractual duty to make mortgage payments.

    Quote Quoting Jennifer Levine
    2. Can the owner claim bankruptcy if he is financially ruined due to attorney fees, etc. - and will this alleviate him of his responsibility to pay for the house (which he no longer owns) forever?
    It depends upon the type of bankruptcy and its resolution. Under a Chapter 13 repayment plan the owner may have to pay some percentage of the mortgage debt. Or, more correctly, whatever arrearage may exist after the sale proceeds are applied to the mortgage balance.

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