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Filed Chapter 7 in Texas and unkowingly made payments on home equity loan then stopped can bank now foreclose on collateral of home equity loan?
Wiki User
∙ 8y ago
The answer to this question can be affected by state law but, as a general rule of thumb, a secured creditor stays secured, even in bankruptcy.
Granted, there are LOTS of exceptions to this rule of thumb, but normally if the creditor has a valid, recorded mortgage on the real estate, then the debtor will either have to pay it or potentially get foreclosed upon. This is true regardless of whether it's the first mortgage, second mortgage, home equity, or whatever.
In some cases a junior mortgage can be stripped (wiped out) in bankruptcy, but this is normally done by the filing of a special motion during the bankruptcy case, and I do not know whether this option is available in your district (it is available in Indiana so long as the debtor files a Chapter 13 and so long as the junior mortgage is COMPLETELY unsecured, so that the debtor owes more on the superior mortgage(s) than the real estate is worth).
As a practical matter, a junior mortgage lender may opt not to foreclose if they know they won't net anything from the foreclosure sale after the superior mortgage lenders get their share, but theoretically the junior mortgage lender can foreclose if they think it is in their best interest.
Whether Texas or the federal district in which Texas lies has any case law affecting this general rule of thumb I do not know, and it is best to consult your attorney.
Also, whether or not one formally reaffirmed a home equity during their bankruptcy case is something worth discussing with the attorney. If the home equity loan was reaffirmed, there may be personal liability on the debtor. If the debtor did not formally reaffirm the debt during the bankruptcy, then while the creditor may still foreclose and take the home, at least the debtor can usually walk away without potentially owing a deficiency balance if the home is not sold for enough money to pay all the mortgage claims. Again, this is a good topic to bring up with your attorney.
Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
Wiki User
∙ 8y ago
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After a chapter 7 bankruptcy can mortgages report late payments?
Yes, late payments on mortgages can be reported. The chapter 7 discharges all unsecured debts, except for student loans, child support and certain taxes, and any balance due on secured debt after the collateral has been surrendered and sold. If you reaffirmed the mortgage and failed to make payments during or after the chapter 7, that can be reported. Late payments can also be reported. Many states prevent penalties for late payments if the payment is made within a certain number of days, but they can still be reported as late if not made on or before the due date.
Can mortgage arrears be put in chapter 7?
No, that can only occur in a chapter 13. If you filed a chapter 7, a lender would be able to get relief from stay (i.e. would still be able to foreclose on you)
You are financing a vehicle but you can no longer afford payments what can you do?
Talk to the lender, or you can file Chapter 13 Bankruptcy to lower the payments where you can afford them.
Can you declare bankruptcy and still keep your house once the debt has been written off?
It all depends what type of chapter you are filling, chapter seven will help you to keep your primary house (where you live now) but you need to keep paying the mortgage, the credit cards and other payments with no collateral will be written off I hope this may help I recommend you to consult a lawyer usually the first consultation is free.
If your mortgage company is trying to have the automatic stay lifted for non-payment can you dismiss the ch 13 and go into ch 7 but still keep the house by then filing ch 13 again?
A chapter 13 can be converted to a chapter 7. The house would be included in the 7. Even if the homestead exemption protected it, it is apparent the lender does not want to reaffirm the loan. So trying to file a 13 again would be pointless. Bankruptcy will only protect a house if the payments are kept up as agreed. Lenders will often try to work out a plan for the borrower to catch up on missed payments while keeping scheduled payments current. There is however no law that requires them to so, a house is a secured debt, the lender can foreclose when the contract is defaulted on, if they so choose.
Does reaffirmation apply to ch 13 And if so and your mortgage was not reaffirmed can the mortgage company foreclose if mortgage payments are current How about after discharge of the debt?
Reaffirmation does apply to Chapter 13 bankruptcies, and the benefit of filing a Chapter 13 case is that you are usually able to retain your home (as opposed to a Chapter 7 case, where all of your assets are normally sold). Customarily, the debtor and lender enter into an agreement within the bankruptcy to cure the arrearages over a period of time while the debtor continues to make monthly payments. That said, if the debtor falls behind on the payments, the lender can petition the court for relief from the automatic stay and proceed to foreclosure. A lender may never foreclose if the mortgage payments are current and the debtor is in compliance with the other provisions of the mortgage. If your lender is foreclosing and you believe that you have made your payments on time (or adequately cured the arrearage in the bankruptcy), then you should contact an attorney immediately.
Can you file chapter 7 in Florida and re affirm your mortgage?
Yes, but its never wise to reaffirm a mortgage. Even if you dont reaffirm, as long as you keep making the mortgage payments, the bank wont foreclose.
After a chapter 7 bankruptcy can mortgages report late payments?
Yes, late payments on mortgages can be reported. The chapter 7 discharges all unsecured debts, except for student loans, child support and certain taxes, and any balance due on secured debt after the collateral has been surrendered and sold. If you reaffirmed the mortgage and failed to make payments during or after the chapter 7, that can be reported. Late payments can also be reported. Many states prevent penalties for late payments if the payment is made within a certain number of days, but they can still be reported as late if not made on or before the due date.
Do chapter 7 bankruptcy relieves you of a mortgage in a divorce but the spouse stills lives in the home?
Filing for Chapter 7 bankruptcy will discharge your personal obligation to pay the mortgage, but it does not remove the lien on the property. Therefore, the mortgage lender can still foreclose on the home if the mortgage payments are not made. In a divorce, the issue of who is responsible for the mortgage payments would typically be addressed in the divorce settlement or court order.
An item secured by collateral can be foreclosed on and sold unless you agreed to be responsible for the loan is what chapter?
chapter 7
What happens if the second mortgage lender hasn't contacted you on a reaffirmation of a loan after a chapter 7?
Nothing happens, the lien still exists- and the 2nd lender can still foreclose if you stoip making payments. The bigger worry is why you would WANT to reaffirm a mortgage debt!
Can they foreclose on a home filed under chapter 7 bankruptcy?
Yes. A mortgage says that the loan is secured by the property. A "chapter 13" does not allow you to stop making payments on your mortgage.
Can mortgage arrears be put in chapter 7?
No, that can only occur in a chapter 13. If you filed a chapter 7, a lender would be able to get relief from stay (i.e. would still be able to foreclose on you)
If automatic stay is lifted what happens next in chapter 13?
Then the secured creditor would most likely foreclose on the property.
If mortgage was listed by pro se Chapter 7 debtor as secured debt with intent to reaffirm but the bank never presented reaffirmation agreement can the bank foreclose once the bankruptcy is discharged?
Yes. Or the lender could choose to file for the automatic stay to be lifted and if granted proceed with foreclosure action before the BK is discharged. _________________________________________ If a person is current on the payments, and stays current, there is NO violation of the mortgage contract, and the lender would not foreclose. Miss a payment or two, and it will be treated as any other delinquent account. But until then, the status quo is maintained, the Chapter 7 not relevant.
What happens if you are late on chapter 13 payments in the state of Georgia?
If you are late on a chapter 13 payment you are at risk of having your case dsmissed. Please try to make payments on time and make payments up if you missed any due to a miscommunication.
How do you restore credit after chapter 13?
Make payments on time
