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Help Lien Strip - Days (or less) away from Discharge...

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    #1

    Help Lien Strip - Days (or less) away from Discharge...

    Hi Folks!

    I am finally on the verge of a discharge. All my attorney needs to do is submit the DSO forms we gave him back in January. I hounded the trustee's office and they updated my case and notified the court of completed plan payments last Monday. Once I saw that on PACER I reached out to my attorney. He basically said that he wanted to make sure that the court order (AP) that stripped the 2nd mortgage would not be a problem with the title company in the event that we refinance or or sell and that he was waiting to hear back from the title company...that was Wednesday and I followed up on Friday.

    Today he indicated that he doesn't have a complete answer and that regardless the title company will want a release from the lender. He says he can go ahead and close it out and we would get the discharge by Wednesday, but that he may need to re-open the case in the future to modify the Order if necessary. But, that it would be better for the chapter 13 to remain open in case he needs to modify the court order so that it is acceptable to a title company and that he feels that makes more sense than discharging/closing the case and then chasing after the bank.

    I feel the opposite is true. I'd rather get my discharge now, wait to see what the bank will do. If they don't release it, I'm more than willing to go to the court and get certified copies of the complaint and order and take it to the bank if I need to. The lien strip doesn't happen unless the case is discharged, per the order so why would we postpone the discharge and risk the court closing out the case without a discharge???

    Anyone have any suggestion or experience??

    Thanks!!
    Filed Chapter 13 with lien strip on 2-28-11 * 341 held on 3-30-11 * First confirmation hearing held 4-20-11, continued until 5-25-11, continued until 6-29-11, continued until 8-10-11. Plan finally confirmed on 8-10-11!!!
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    #2
    A discharge is completely different than closing. Closing is administrative. You can have the discharge entered and the case remaining open in order to deal with administrative issues.

    The deal with lien strips is always quite interesting. Some lenders comply and immediately issue and record a Satisfaction of Mortgage or the required release of lien with the recorder of deeds. Others need to be prodded, while others must be dragged back into the bankruptcy court to explain why they haven't released the lien.

    I hope that your attorney meant that they would ask for the discharge to be issued, but the case to be held open (not closed) pending the creditor complying with the lien strip order. In some cases, the Court can issue a recordable document that would release the lien. You'll have to work with your attorney on the difference between discharge and close.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment

      #3
      Perfect! I will run this by him. He is using discharge and closing interchangeably and I'm looking at another case in PACER that was discharged in August and not closed until October so you are right. I think he means well but he seems kind of clueless at times. I'll keep you all posted so we can have my discharge party!!! LOL!!!
      Filed Chapter 13 with lien strip on 2-28-11 * 341 held on 3-30-11 * First confirmation hearing held 4-20-11, continued until 5-25-11, continued until 6-29-11, continued until 8-10-11. Plan finally confirmed on 8-10-11!!!

      Comment

        #4
        LOLLY78..... Please keep us updated on how it go's.

        We have a lien strip and have been discharged since 2/28/17 , Haven't heard a thing . I was going to give it some time before getting out my big stick.

        Anybody know how much time to give the 2nd ? Order said upon discharge.
        • Likes 1

        Comment

          #5
          This is my dates, but YMMV:

          12/18/2016 - discharged from chap 13
          12/31/2016 - 2nd mortgage lender recorded a full reconveyance of title to us. Copy was sent by snail mail. American Securities Company was the trustee, WFB was the investor/2nd lender.
          01/06/2017 - judge voided the lien, aka lien strip (weird huh? court was behind by 7 days)
          02/24/2017 - judge released the trustee, and my case was finally closed.

          For the 2nd mortgage, WFB just hand over the deed before the judge stripped the lien, like they're eager to get rid of us.

          Mavric, just hang in there. I agree with justbroke that second lien stripping varies by lender.

          Comment

            #6
            Originally posted by mavric View Post
            LOLLY78..... Please keep us updated on how it go's.

            We have a lien strip and have been discharged since 2/28/17 , Haven't heard a thing . I was going to give it some time before getting out my big stick.

            Anybody know how much time to give the 2nd ? Order said upon discharge.
            Keep bugging your attorney- I'm in California and was discharged 01/08/16. I recorded everything with the county clerk but the lien still shows on title. Im still researching but it looks like I'm going to have to hire an attorney to help me get the lien removed from title.😡
            Keep us posted!
            Last edited by Vmost66; 04-14-2017, 06:14 PM.

            Comment

              #7
              Originally posted by Vmost66 View Post

              Keep bugging your attorney- I'm in California and was discharged 01/08/16. I recorded everything with the county clerk but the lien still shows on title. Im still researching but it looks like I'm going to have to hire an attorney to help me get the lien removed from title.😡
              Keep us posted!
              Did you record an order voiding lien? The lien itself will always show up in public records. What is important is having a reconveyance or order recorded so the lien is no longer effective.
              LadyInTheRed is in the black!
              Filed Chap 13 April 2010. Discharged May 2015.
              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

              Comment

                #8
                Originally posted by LadyInTheRed View Post

                Did you record an order voiding lien? The lien itself will always show up in public records. What is important is having a reconveyance or order recorded so the lien is no longer effective.
                I did not file an order voiding lien. All I filed was a certified copy of the "motion to avoid junior lien" along with the "order of discharge" as my attorney instructed.
                How do I file an order voiding lien?
                Im sure I would need to hire an attorney to do this.

                Comment

                  #9
                  Originally posted by Vmost66 View Post
                  I did not file an order voiding lien. All I filed was a certified copy of the "motion to avoid junior lien" along with the "order of discharge" as my attorney instructed.
                  How do I file an order voiding lien?
                  Im sure I would need to hire an attorney to do this.
                  After a few hours on the phone I was able to get through to Nationstar's bankruptcy department. They actually had my bk case#. They operator didn't know why the lien hadn't been removed but sent my information up the ladder. I will have to wait 5-7 business days to find out. My lawyer has failed to respond to my requests (typical). Hopefully Nationstar will come through for me. I will post the outcome.

                  Comment

                    #10
                    Originally posted by Vmost66 View Post
                    I did not file an order voiding lien. All I filed was a certified copy of the "motion to avoid junior lien" along with the "order of discharge" as my attorney instructed.
                    How do I file an order voiding lien?
                    Im sure I would need to hire an attorney to do this.
                    The motion to avoid junior lien would not be sufficient, unless the discharge order states that the lien was voided. If the discharge order doesn't cover that, you would need to record the order that was entered in response to the motion to avoid junior lien. You would not need an attorney to record the order. You can get a certified copy of the order from the bankruptcy court and then record it with the county recorder. You may have to add a recording cover sheet. In my experience, county recorder staff are pretty helpful in telling you what you need to do to make a document recordable.

                    Originally posted by Vmost66 View Post
                    After a few hours on the phone I was able to get through to Nationstar's bankruptcy department. They actually had my bk case#. They operator didn't know why the lien hadn't been removed but sent my information up the ladder. I will have to wait 5-7 business days to find out. My lawyer has failed to respond to my requests (typical). Hopefully Nationstar will come through for me. I will post the outcome.
                    I bet they will. I got a certified copy of my order and was about to record it. For some reason, I decided to look at the recorder's records online before sending in the order. I saw that Wells Fargo had all ready recorded a reconveyance. So, I didn't need to record the order.
                    LadyInTheRed is in the black!
                    Filed Chap 13 April 2010. Discharged May 2015.
                    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                    Comment

                      #11
                      Originally posted by LadyInTheRed View Post

                      The motion to avoid junior lien would not be sufficient, unless the discharge order states that the lien was voided. If the discharge order doesn't cover that, you would need to record the order that was entered in response to the motion to avoid junior lien. You would not need an attorney to record the order. You can get a certified copy of the order from the bankruptcy court and then record it with the county recorder. You may have to add a recording cover sheet. In my experience, county recorder staff are pretty helpful in telling you what you need to do to make a document recordable.



                      I bet they will. I got a certified copy of my order and was about to record it. For some reason, I decided to look at the recorder's records online before sending in the order. I saw that Wells Fargo had all ready recorded a reconveyance. So, I didn't need to record the order.
                      I'm keeping my fingers crossed! Hopefully a nudge is all they needed. The only thing I have received from Netstar was a 1099-C ( Discharge of Debt).

                      Comment

                        #12
                        Had a similar situation here. My second mortgage was with CitiFinancial. A collection agency purchased the bad debt and was paid in our plan. But CitiFinancial ALSO tried to get their additional money from our personal loan that defaulted. A few years into the plan I received a letter from Citi stating that the loan was forgiven and as a gift they presented me with a 1099C (IRS CANCELLATION OF DEBT). Over $11,000 of the debt was cancelled however because I was still in the chapter 13, I had to call the IRS to get the low down on the tax implications while being insolvent.

                        Each Bankruptcy Court has a IRS UNIT that deals with these cases. My agent here in Nashville, pulled up my IRS Account and saw the 1099C then verified that I did not have to APPLY THE ADDITIONAL INCOME for this 2016 Tax year because the DEBT WAS FORGIVEN WHILE MY CH13 WAS STILL ACTIVE. If your case is closed, you more than likely wont have to pay either if the Judge STRIPPED THE LIEN from your MORTGAGE!

                        Good Luck and ROCK ON!

                        Comment

                          #13
                          vmost66 will definitely not have to pay income tax on the debt discharged in BK. For more information go to http://www.bkforum.com/blogs/ladyint...ischarged-debt
                          LadyInTheRed is in the black!
                          Filed Chap 13 April 2010. Discharged May 2015.
                          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                          Comment

                            #14
                            Originally posted by LadyInTheRed View Post
                            vmost66 will definitely not have to pay income tax on the debt discharged in BK. For more information go to http://www.bkforum.com/blogs/ladyint...ischarged-debt
                            Correct! I didn't pay taxes on the 1099c. It would have been astronomical since it was $167k 🙄

                            • Likes 1

                            Comment

                              #15
                              Update......... Received letter from bank that held my 2nd, and we had a lien strip in ch 13 . Cancellation of security deed !!
                              Didn't know this but, they had 60 day's to release after being paid. Discharged 2/28/17 so we got it on day 60.
                              This was the last piece of my ch 13 WE ARE DONE!!! YAY

                              Comment

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