If a debt is "discharged" to I still have to pay?

[amyjrn]

If a debt is "discharged" to I still have to pay?

I will try to keep this simple. I bought a house in 2003 and did an 80/20 split mortgage. Got behind in payments, cc debt, yada yada and filed for chapter 13 in 2005. As per the bankruptcy agreement I made all BK payments and am done. During this 5 year time frame of repayment both of my mortgages (the 80 and the 20) were transferred/sold to different companies.


Back in Feb I was having some financial hardships (ie divorce) and called the company that has my 20% mortgage to let them know my payment would be late and to see if they could work with me on late fees. They took my account number and said they had to transfer me to the "bankruptcy department" at which point i was told that my loan was no longer collecting interest, no late fees would ever be assessed, and that there was actually no minimum payment amount??? She told me to "just pay what I could." And that if I happened to "come into some money they would take 50% of what is owed and call it even."

During the 5 years of my bankruptcyness (yes I invented a word) I did not received any monthly statements from either mortgage company. However, once the 5 years was up I did start to receive monthly statements from the company with my 80% mortgage....But have never heard a peep from the company with my 20%.

I recently pulled my credit report and it states that my 20% mortgage was "discharged in bankruptcy" as does the other CC debt I included in the BK.....so was the 20% mortgage treated like the other CC debt?

Thanks

[biotechsolution]

more than likely you're upside down. If the house isn't worth the 80% mortgage amount then the company that holds the 20% knows that if it's sold or you walk away they get nothing.
So they'll take 50% of what you owe, it's a win for them.
However, they still hold a lien against the house for the 2nd mortgage so even if the loans are discharged the house is still collateral. Bottom line, if you want to stay in the house eventually you'll have to deal with the 2nd
What they can do is wait out the housing market until values return above the 1st mortgage and then foreclose. They will apply interest and late fees during the whole time.

[dneil]

did they do a lien strip in your chapter 13?

[amyjrn]

I don't know what a lein strip is....so how would I know if I had one? I did have PMI. I'm not sure how that would effect the whole senario. Side note: the attorney who did my BK passed away last year so I don't have an attorney to call with out cost to me. I have received conflicting advice on this matter. How would I check to see if the 20% mortgage company is still using the house as collateral?

[biotechsolution]

They are still using the house for collateral, the only way they wouldn't be is if you paid off the second and they gave you a lien release. Check your county records to the lien against the house.
If you were underwater (your house worth less than just the first mortgage) your lawyer should have done a lien strip, meaning because the house was worth less than the 1st mortgage the 2nd mortgage had nothing to secure itselft to so it could be removed. But your lawyer would have had to file that motion.
If the lawyer didn't file that motion than the 2nd is still secured by the house and at some point the 2nd lien will have to be release if you want to sell it.
Or worse if your house improves in value the 2nd will come looking to collect the note and could do this by fourclosing.

[amyjrn]

Greentree is who has the 2nd mortgage. I checked my county property records and there is NOTHING there from Greentree. However, they did buy this note while I was in BK which makes me think at some point they will want to collect. I haven't made a payment to them in 6 months and haven't heard a word from them.... I'm not quite sure what to think??

[enginegirl]

Call your lawyer!

[amyjrn]

The lawyer who handled my case passed away last year...and I'm not in a position to pay another lawyer for advice right now. I appreciate everyone's info. Thanks.

[LadyInTheRed]

If Greentree bought the loan, there would not necessarily be anything recorded with the county recorder. The Deed of Trust that was recorded by the original creditor may state that it applies to assignees of the note without the need to record an assignment of the Deed of Trust.

I suggest you get a PACER account and look up your case to see if there is an order stripping the lien. Read the following Sticky to learn about PACER: http://www.bkforum.com/showthread.ph...Guide-amp-Tips You could also go to the court to look up your case.

The order may be called an order valuing lien or order avoiding lien. If there is such an order, you need to get another order to remove the lien so it can be recorded. When attorneys die, another attorney usually takes charge to wrap up their practice. You should find out who that attorney is and ask them for help, especially if the fee you paid included a lien strip. If you don't find help that way, try legal aid or your local bar association. You could also try to do it yourself in which case you may find some help here.