If a mortgage co. got a relief of stay on our mortgage during Chapter 13, are we liable for the deficiency when they foreclose?

Asked over 1 year ago - Los Alamos, NM

The house was given back during the Chapter 13 BR. Since we have been discharged from Bankruptcy, (March 2012), the mortgage co. is stating that we are liable for the arrears and that we will be sued for the deficiency when they foreclose. The house was to be sold (auctioned) in April of 2012 but postponed to June (didn't happen then either) due to the Class Action law suite by the government. So it hasn't been sold yet. I also believe that they shouldn't be calling me everyday either even on Sundays.

Attorney answers (3)

  1. Michael Avanesian

    Pro

    Contributor Level 16

    4

    Lawyers agree

    Answered . You should talk to your chapter 13 attorney.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may... more
  2. Dorothy G Bunce

    Pro

    Contributor Level 20

    4

    Lawyers agree

    Answered . If you received a Chapter 13 discharge, this court order eliminated all of your personal responsibility to pay this debt. You may want to retain a bankruptcy litigation attorney to pursue the creditor for violating the bankruptcy discharge, which can include payment of the attorney fees as well as any damages you sustained due to this creditor misconduct. Hope this perspective helps!

  3. Joseph Ryan

    Contributor Level 12

    1

    Lawyer agrees

    Answered . Did you get a chapter 13 discharge or did you convert to a 7 and get a chapter 7 discharge? Either way, your personal liability on the note was discharged. The only scenario I can imagine where it wouldn't be is if the lender got relief, you converted to a 7 and indicated 'reaffirm' on your statement of intention and then reaffirmed a mortgage in foreclosure. If you were represented by an attorney, that didn't happen. I'm not even sure you can reaffirm a the debt after the lender gets relief - and I don't think the lender would send a reaff.

    So no, you're not liable.

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