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How foreclosure process affects home owner after chap 7 bankruptcy completed without reaffirmation of mortgage

Aberdeen, MD |

our chap 7 bankruptcy, in maryland, was completed in oct 2008, without reaffirming our mortgage. both my husband and i receive unemployment and had temp lowered pmt with lender that is no longer in place we just recvd 30 notice of foreclosure. we need to fix up home to sell & cannot affrd to do so, we cannot come up the the back amt of pmts due, nor continue non-lowered pmts. is there a benefit to just walking away now b4 foreclosure begins vs leaving after it starts? since we did not reaffirm, will we be liable for deficit amount before vs after foreclosure process begins? once foreclosure begins, can we still contents our furniture, etc? (we'd leave appliances & such)
thank you in advance

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Attorney answers 5


Your question really contains two parts - how does the bankruptcy affect the mortgage? and what happens in foreclosure?

The Chapter 7 bankruptcy discharged your obligation to pay the mortgage. If there is no equity left after selling the house and because you did not reaffirm, there will be no deficiency. Your mortgage should show up on your credit report as discharged in bankruptcy.

The second question depends on state law and whether a court must be involved or not. As I understand it, Maryland is a judicial foreclosure state (it involves the courts). The timing and process is a matter of Maryland law and I cannot advise on that (I am licensed in Virginia). I can tell you that you remain liable on taxes, homeowners association dues, if any, and following local ordinances on maintenance until the house is sold. I advise my clients to start looking for a place, but to stay until the sale is completed. You do run a risk of not having a place to go, but given that the discharge happened more than a year and a half ago, you are in a better position than most.

Hopefully a Maryland attorney can give you more information on Maryland law.

[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]

Mitchell P. Goldstein
Richmond, VA 23230
804-673-4358 Office Email


Since there was no reaffirmation of the mortgage you will not be responsible for that debt. i tell all of my clients to stay in the house until they kick you out because the true liability is that you own the are on the Deed. maintain and insure the prioperty until the foreclosure goes through and live there rent free.

Good Luck.

Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.


You are not personally liable for the mortgage as long as you didn't reaffirm or sign a modification agreement with the lender. So when they foreclose, you will not be responsible for the deficiency balance ("shortfall"). The only thing you may be held responsible for is homeowners' association ("HOA") charges that came due after your bankruptcy was filed. If you don't have an HOA you won't be responsible for anything regarding the house.

The foreclosure process is complicated in Maryland. I have summarized the procedure in a legal guide. You can find it at . If the link doesn't work please copy and paste it into your browser. You may have more time than you think so please read the legal guide and feel free to contact me if you want to discuss this further.

There is really no advantage to walking away sooner than later. Just make sure you have another place lined up to move into once you are evicted. Make sure you move all of your personal belongings out prior to eviction. Otherwise you may lose them. Good luck.

Alon Nager
Russack Associates, LLC
100 Severn Ave., Ste. 101, Annapolis, MD 21403

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.


Sorry the link to the legal guide on Maryland foreclosures can be found at:


Sorry the link to the legal guide on Maryland foreclosures can be found at:

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