Is this even LEGAL????

[Struggling11]

Filed for Ch.7 Bankruptcy in March 09. Did not reaffirm 1st or 2nd mortgage. Both were discharged in July 09. Received foreclosure summons yesterday that Wells Fargo is requesting a judgment against me for the balance of the mortgages, interest, late charges counsel fees, costs and all other sums due under the mortgage.

Is this legal? Aren't they in violation of the Discharge?

[startover24]

Do you now have equity in the house that you didn't have when you filed?

[IamOld]

Filed for Ch.7 Bankruptcy in March 09. Did not reaffirm 1st or 2nd mortgage. Both were discharged in July 09. Received foreclosure summons yesterday that Wells Fargo is requesting a judgment against me for the balance of the mortgages, interest, late charges counsel fees, costs and all other sums due under the mortgage.

Is this legal? Aren't they in violation of the Discharge?

I would say yes - and as I think everyone here would say - call your atty (or a new one if your old one is not there any more) asap...you may just have a case!!!

[Struggling11]

No equity in the home.

[Freddy03]

Are you current on the mortgage or did you surrender the house?

[Struggling11]

Did not surrender nor did I reaffirm. I was making payments until this past January when my husband became ill and I was unable to maintain the payment. I attempted to make payment in February and the bank wouldn't accept partial payment (1 month payment) they wanted the full amount. I have managed to put the mortgage payment in my savings account for Feb March April and will do so again for May. I wish the bank would work with us, but everytime I call them Loss Mitigation says they can't speak with me because it's a bankruptcy case and they transfer me to bankruptcy department and the BK department says I have to speak with Loss Mitigation. I have gotten absolutely nowhere with them and now they have filed foreclosure proceedings. Feel lost with nowhere to turn!

[debee]

They won't get the judgment because the debt was discharged in bankruptcy. It may be their foreclosure dept has not been kept informed by their bankruptcy dept. It's probably standard foreclosure speak. Anyway, you don't have to worry about them actually getting a judgment against you.

[startover24]

I think they can foreclose, depending on your state laws, but I don't see any way you're liable for anything. Did you use a lawyer in BK?

[Struggling11]

Yes, used a BK lawyer. Have an email out to her and hopefully hear something back soon. Thanks for the responses?

[debee]

They can only foreclose if you are in default.

[shark66]

I would *strongly* suggest that you pull out the original mortgage documents and read through them in the calmest of fashions.

There have been cases where the lender put in a clause that once in BK you're automatically in default, yada, yada, yada whether you're paying or not.

No idea of how this would fly in court. Not too well, I presume, but honestly, I don't like the fact that you're in Delaware, the very capitol of creditors big and small...

Keep us posted on this most interesting - if undoubtedly unpleasant - turn of events.

Good luck.

[debee]

Ipso facto clauses based on the insolvency or financial condition of the debtor are unenforceable once a person files bankruptcy. It's in 11 USC 541(c). They can only foreclose if the debtor defaults in the usual way (doesn't pay the mortgage, insurance, or taxes, etc).

[despritfreya]

I am assuming you are not current and you cannot bring payments current. I am further assuming that unless you were able to get a "loan modification" you were going to walk away. . . but live in the home until you were required to leave.

This sounds like nothing more than a typical judicial foreclosure. The dollars requested is not directed at you. The creditor is seeking a judgment for a sum certain for the purpose of determine the amount of the lien (or its credit bid - however you want to look at it) as it relates to your right to redemption. Read the document more carefully. I will bet there is a phrase in it stating that the lender is seeking "in rem" relief.

You probably still have plenty of time in the home. Check your state law for the amount of time that must elapse between the entry of the judicial foreclosure judgment and the finalizing of the foreclosure - probably a 90 or so day clock (I understand that in some states it is as long as 6 months but, since mine typically uses a non-judicial foreclosure process I am not sure.)

Des.

[tobee43]

des, i just wanted to mention that although our...or, excuse me, our OLD property which is now chases baby, is located in new jersey, a judicial state, however, there has been not a ONE foreclosure since may of 2009, in that county? we have no clue why. but it appears some areas are running behind, or perhaps the judicial foreclosures are being more carefully examined and or the paperwork being more scrutinized by the courts?

[Sweetpea3829]

Ipso facto clauses based on the insolvency or financial condition of the debtor are unenforceable once a person files bankruptcy. It's in 11 USC 541(c). They can only foreclose if the debtor defaults in the usual way (doesn't pay the mortgage, insurance, or taxes, etc).

Debee...correct me if I'm wrong, but I was under the impression that, after a Chapter 7 is discharged, the creditor (ie mortgage bank) CAN reclaim the property at any time, even if the payment is current. My further understanding is that generally, they don't. It doesn't typically make sense for them to do so, unless the house had quite a bit of equity in it. But...I thought they could still seize the property, even if you were current.