I had a BK discharge in June of last year. I decided to keep my home and continue making the payments. During the BK filing , I actually applied for a loan mod and was declined as soon as I assigned a discharge. So, time passes on, now I get a letter from the bank stating the chap 7 released me from the loan liability , but the lien is still valid and enforceable on my property. The bank wants me to call them to establish payment arrangements. I don't know if I have negotiating power with the bank or I am at their mercy to accept their terms , i.e. higher interest rate, short sale deed in lieu? What do I do? Who do I talk to?
Real Estate Attorney
Even though your personal liability was discharged in the bankruptcy, the lien still remains on your property. If the mortgage is not paid, the bank will foreclose. Your request for a modification may have been denied for a variety of reasons. My law firm does loan modifications, short sale negotiations and other forms of troubled debt resolution. Please call us to discuss your case. We do not charge for a consultation and we may be able to assist you.
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Insurance Law Lawyer
I agree with the above answer - although your personal liability is discharged, the lien is enforceable against the property. Have you fallen behind on payments since the 7? Were you current on payments when the 7 was filed?
I agree with my colleagues. Consult with a bankruptcy attorney who handles loan modifications if you plan to keep the home.
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If you have been current on your loan obligation (including taxes and insurance) the letter is probably a mistake. Call them and ask about the letter. That is the first step. Although you were not eligible for a loan modification earlier, circumstances may have changed. Apply for one now. The worst that can happen is that you will again be determined ineligible and you're stuck with the present terms.
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