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Illinois Bank's violation in collecting on discharged in chapter 7 bankruptcy

Quincy, IL |

In 2003 i was foreclosured on 3 rental properties and my home that had a home equity loan with a $15,000.00 limit. I had a sum of $5,792 owed after foreclosure on my home equity loan. I filed chapter 7 bankruptcy Jan.2004. In June 2004, at bankruptcy court before court the bank asked me what I wanted and I said to keep my home they said I would have to agree to a loan of $15,000.00 9.5 interest and quit claim the deeds of the rental properties. Then in court I agreed in the front of judge to these terms. And also that day all my other debts including the rental properties were discharged. In October 2004 I signed new mortgage papers for my home for $15,000.00. In Sept 2012 Im looking at my orginal loan papers they have for purpose of as APARTMENT DEFIANCY. So Im assuming they applied extra amount after my real debt of $5792 to my discharged rental properties.. My question isn't that in violation of the bankruptcy rules/laws on discharged debts

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Attorney answers 4


Your question does not make complete sense. First you say the properties were foreclosed in 2003 (in which case you would no longer own them), and then you somehow owned them again in 2004. You say your home had an equity line with a $15,000 limit (and an outstanding balance of $5792), but you later agreed to and signed a new agreement to pay $15,000 (perhaps a reaffirmation) in June 2004? 8 years later you signed a new loan agreement for $15,000. You just mention an equity line, so we don't know of other liens on the home or the value of the home.

Now, you apparently question why you owe more than $5792? You told us twice you agreed on a loan of $15,000, and presumably you can look at these document to see what you agreed to pay back. If you have agreed to pay back $15,000 in a reaffirmation or refinance, those are the terms of what you now owe. You might comment here, or amend your post to clarify the details.


It is nearly impossible to answer you questions without more detail and without seeing the documents that you signed. However, it appears that your reaffirmed a $15,000 debt HELOC against your home and the judge approved it. If true, I don't see how this is a discharge violation if you agreed to the $15,000.

I recommend taking the loan papers to a local bankruptcy attorney for further advice.

First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.


It sounds like you reaffirmed the second mortgage on your home. That means it was not discharged and you are still liable for the debt. Did you have a lawyer for your chapter 7 case? Did you appear pro se (by yourself) before the court to reaffirm the debt? You agreed to the new terms for the loan. You should talk to a bankruptcy attorney to help you understand what happened and what you are obligated to pay on the reaffirmed debt. If you did not have a lawyer who helped you with the chapter 7 case that you can contact, and cannot afford a lawyer, the court may have a help desk or a panel of lawyers that have agreed to help for free. Best of luck to you.


Your fact scenario doesn't make sense and a review of the docket is necessary.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.

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