Need info on lien

[Lar1267]

I was facing foreclosure on 2 investment properties 5 years ago. I was told they were not going to waive a defiency judgement so my lawyer advised I file bk, which we did. With the homestead exemption, i was able to keep my house and car, but let the condos go in the bk. So five years later I try to sell my house and am told I have 2 liens from the condos on my house. I told the attorney that was supposed to have been covered in the bk. I contacted the lawyers who handled this for me to find they are closed for the holiday weekend. Now I have been stressing out for days waiting to hear something. Can anyone help me out here??
p.s. I have since married and my husband and I are downsizing. We bought a little condo with a " bridge loan" from family with the equity of my home sale to pay them back. So we gave no mortgage on the condo and I'm worried they may take it. Very stressed.

[despritfreya]

Welcome to the Forum. Do you have a copy of each lien? What are they for? Not enough info.

Des.

[bcohen]

Assuming that the liens on your home are from pre-petition debts, such as HOA dues/fees/penalties which accrued before you filed for bankruptcy, the bankruptcy discharge eliminated your personal liability to pay. This means that the judgment creditors cannot attempt to place liens upon your newly-purchased condo, or contact you to demand payment.

Unfortunately, the bankruptcy discharge does not remove a properly recorded lien. If the liens are avoidable, then you will need to reopen your bankruptcy and file a motion to avoid the liens. If you do not do this, then you won't be able to sell your house without paying off the discharged debt, which would be silly.

[Lar1267]

I don't have much information since the office was closed. I do know the amount of each is around $72k which would be defiency judgement for each condo. If I was told this could happen, I would have been better off letting my home go at that time too. I do not have that kind of money to pay that off. So do I just sit on the house forever? At this point I have it under contract and the bank will be paid. Can they take my equity? Homestead in SC is $56k and I stand to walk away with $69k after commissions. That would mean I can't repay family loan. I followed every step the lawyers told me. They never told me this could happen.

[Lar1267]

How do I know if the liens are avoidable?

[Lar1267]

The condos were returned to the creditor and I believe they auctioned them off.

[despritfreya]

Were these deficiency judgments entered before or after you filed bk?

Des.

[Lar1267]

I'm honestly not sure how that works. I trusted the lawyer blindly I guess. I was assured that what he was doing would fix everything. I'm amazed that the closing attorney seems like they have never seen this before. I took my bk file and discharge to them and they could not tell me if I was ok or not. The only thing they said is that bk is federal court and possibly the state didn't have the bk file. I am so confused and I'm sorry I don't know more.

[Lar1267]

If it makes any difference, the condo mortgages and my home mortgage were all through the same bank. It would seem to be in their best interest to allow the sale to go through and maybe try to get my equity. If I sit on it, they won't get any money.

[justbroke]

As Des writes, there is not yet enough information to make any true guess as to the status. You may need to wait until your attorney is open on Monday. The kicker is on what date the liens, from the deficiency judgments, were recorded (which is an open question from Des). You'll have to find the answer to that question before we'll know if the liens are avoidable. It's just confusing as to when the condos were actually foreclosed upon and when the deficiency judgment was entered (and/or recorded).

As bcohen mentioned, a valid lien is a valid lien. The question is whether it's valid and/or voidable (or void ab initio).

[Lar1267]

I understand. This was a strategic default so I went to the lawyers prior to ever missing a payment or hoa. So he handled everything from the beginning. I wish I had more answers. I had to notify him the moment I received the intent to foreclose letters and I believe that's when he started the bk process. So he handled everything for me.

[Lar1267]

I did not know about the liens so I don't know when they were filed. The waiting is killing me.

[Lar1267]

The developers abandoned the project and the value dropped by at least half of what I paid. There was no way I would ever come out of that deal on a positive note.

[justbroke]

So far, it appears that you filed bankruptcy right at the threat of the lawsuit. That would lean in favor of a lien that was recorded after you filed and after you surrendered the property in the bankruptcy. There is a question, however, on the HOA dues which your attorney will need to answer (in Florida, we don't need to pay the 12 months of HOA dues prior to foreclosure).

I would relax a little even though I know the anticipation is running around your stomach like butterflies trying to find a way out.

[Lar1267]

I do know that the HOA was included in the bankruptcy. I saw it on the paperwork where it listed each thing. 2 condo mortgages and 2 HOAs