Chapter 7: Lien Strip Alive in Florida!

[TBA]

reopened and filed motion. will update when we have news.

[justbroke]

reopened and filed motion. will update when we have news.

Let me know! I'm thinking about paying the $260 and reopening mine as well. I do have some more leverage than most since I actually was granted a lien strip in my (converted) Chapter 13.

[TBA]

Once the lien is stripped... then what?

Hasnt happened yet, but i want to make sure we have all of our ducks in a row (and get everything i paid for from my attorney). Once the judge signs the order, do you record the order with the clerk in the county where the property is located? Do you take the order to the bank and request a release to be filed (would they? This kind of makes me giggle as by law, they would be required, but they are required by law to do a lot of things... yet another set of court costs?!).

I am thinking long (read really really long) term here, and want to make sure we can get clear title in the future should we decide to sell, etc.

[justbroke]

The order requires the lender to file a Release of Mortgage. If they do not do so within 30 days of the order, you go back to the bankruptcy court to get a "recordable" lien release. Typically, the lenders follow the order and submit the release and return the original Note to you without any issues.

[TBA]

<crosses fingers> sounds good to me!

[brokeinfl]

We are attempting a strip in M.D.F., as of yesterday a 'proposed order' has popped up on pacer, but it is restricted, cannot be viewed. Any ideas what that's all about?

[justbroke]

A proposed order is standard when an attorney submits a Motion to do something and there is what we call "negative noticing". The proposed order is used by the Judge when granting the Motion. It saves a lot of time and moves things along by having these proposed orders accompany the Motion.

Nothing for you to worry about. Once the time has elapsed on your Motion to Determine Secured Status and to Strip Lien, which should be 30 days from the entry of the Motion, barring any response by the creditor, the Judge will take that proposed order and grant your motion.

[brokeinfl]

Thanks for the info justbroke. Always another deadline to wait out!

[IBroke]

Update:

Had a phone-conversation with the attorney.

He provided me with the number of a local appraiser to set up an appointment. He is going to have a look at my mother's personal property. The appraisal will cost us an additional $120. I expected that we need an appraisal because our house is quite big in relation to the personal property (i.e. furniture) my mother owns. i bought new furniture after my discharge and fortunately, I have the bills in my name to support that claim.

After that, we talked about the reaffirmation. We agreed that my mother is going to list "reaffirm" as intention but our attorney won't sign it. He said that it is very unlikely that the lender will prepare a reaffirmation agreement in the first place. So in the end, we will be looking at "stay & pay". However, our attorney could not answer if the Garn - St. Germain Act applies to non-reaffirmed mortgages, too. He said that this law would be outside of his area of practice.

Considering that there is no realistic chance that this mortgage is going to be reaffirmed in the first place, I determined that it is a mood point to worry about it. I'll simply have to take a chance on it and 'til now, I don't see any reason whatsoever why this act shouldn't apply. The lien is not affected by the discharge and to my knowledge, the debt is still there, too. It is just not "collectible" from my mother.

[IBroke]

I just took a closer look at the Act:

http://www.law.cornell.edu/uscode/text/12/1701j-3

It says:

(d) Exemption of specified transfers or dispositions

With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—

(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
(2) the creation of a purchase money security interest for household appliances;
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(4) the granting of a leasehold interest of three years or less not containing an option to purchase;
(5) a transfer to a relative resulting from the death of a borrower;
(6) a transfer where the spouse or children of the borrower become an owner of the property;
(7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or
(9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.


Even a non-reaffirmed loan remains a loan, right?

[justbroke]

Even a non-reaffirmed loan remains a loan, right?

And that's what people don't realize a bankruptcy discharge actually does to a loan. It does not, in any way, extinguish the loan, or any lien! The only thing the discharge does is remove the creditors ability to collect, pursue collection, or in any way intimidate the debtor into paying. The debtor can pay if they choose, so that means the loan still exists.

So, from a purely technical standpoint, I believe that the loan is still there!

[IBroke]

And that's what people don't realize a bankruptcy discharge actually does to a loan. It does, in no way, extinguish the loan, or any lien! The only think the discharge does is remove the creditors ability to collect, pursue collection, or in any way intimidate the debtor into paying. The debtor can pay if they choose, so that means the loan still exists.

So, from a purely technical standpoint, I believe that the loan is still there!

Exactly, justbroke!

I would even go so far and say that the DEBT is still there - but as you pointed out, the creditors lose the right to collect, pursue collection, or in any way intimidate the debtor into paying.

Therefore, I don't see a reason why the question of reaffirming or not should have any impact in regards to the Garn - St. Germain Act. After all, future due-dates and amounts due under "retain & pay" in case of a non-reaffirmation (especially the determination if a borrower gets into default or not) are based on the original loan-agreement. If a discharge without reaffirmation would void/eliminate the entire loan, such a determination would be impossible.

[justbroke]

So, here's wishing you best of luck and I hope your parent(s) stay around a long time!

[IBroke]

So, here's wishing you best of luck and I hope your parent(s) stay around a long time!

Thanks, justbroke!

Although all the paperwork is complete, the actual filing might still be a couple of weeks out. We have to deal with the appraiser and wait for my mum's medical bill from the hospital ER and the physician. She has a painful compression fracture in her spine. Nothing too serious but it surely hurts..

[TBA]

IBroke, is there any reason you are doing the appraisal and not using the tax assessors value (or are you referring to personal property and i just cannot read this am?)? the only reason i ask is because the two petitions i saw used the tax assessors value and were accepted by the judge.

Just curious.