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Yes, a creditor can still foreclose on a house if the debtor files for Chapter 7 bankruptcy. While the bankruptcy filing can temporarily halt foreclosure proceedings due to the automatic stay, this protection is usually short-lived, especially for secured debts like a mortgage. If the debtor cannot catch up on missed payments or negotiate a repayment plan, the creditor may proceed with foreclosure after the stay is lifted.
What else can I help you with?
When does a credit card company start garnishing your wages?
After the creditor wins a lawsuit and has been awarded a judgment against the debtor and then files the judgment as a wage garnishment action.
What is the process for resolving debt in court?
Resolving debt in court involves a legal process where a creditor files a lawsuit against a debtor to collect the owed amount. The court will review the case, and if the debt is proven, a judgment will be issued. The debtor may be required to pay the debt, negotiate a settlement, or declare bankruptcy to resolve the debt.
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?
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.
Will the the credit of the co-owner affected if a co-signor files bankruptcy?
No. The co-signer is no longer responsbile for any part of the loan. If you default, the creditor can not attempt to collect from them.
If one files bankruptcy and has a co-signer will if affect their credit rating?
If the account the cosigner is on is included in the bankruptcy it will appear on their credit report. In most cases the cosigner will not be relieved of the debt when the primary holder files for bankruptcy. The creditor(s) can then pursue the cosigner for the collection of money owed.
Can an uncollected judgment by a creditor be written off when the debtor files Chapter 7?
Yes.
When does a credit card company start garnishing your wages?
After the creditor wins a lawsuit and has been awarded a judgment against the debtor and then files the judgment as a wage garnishment action.
Who files the release of judgment?
Normally, when a judgment is paid in full, the judgment creditor gives the debtor the release of judgement (sometimes called a warrant of satisfaction). It is then up to the debtor to file or record it because he/she wants to make sure the lien is removed.
Is it legal for a credit company attorney to be sending relief from stay motion papers directly to the creditor instead of the attorney which represents the creditor that has filed chapter 13?
If a creditor files a motion for relief from stay in any bankruptcy proceeding, the papers should be served on the debtor's attorney of record.
When a debtor enters bankruptcy a secured creator retains priority to the secured assets unless it files a proof of claim for the full amount owed?
Actually, a secured creditor only retains priority if they file a claim.
Can a court act as a collection agency for a third party?
Courts do not collect debt owed when it pertains to a civil judgment. In civil cases the judge orders a judgment to be entered against the debtor, the judgment creditor uses the judgment in whatever manner is allowed by law to collect the debt. Example, the creditor receives a judgment in a civil suit, then files the judgment as a wage garnishment against the debtor, the judge signs the garnishment order and the sheriff or other officer of the court serves the garnishment order on the employer of the debtor.
Can a creditor sell a repossessed vehicle they have had in their possession if the debtor files bankruptcy?
Possession is 9/10th of the law. Not if the vehicle qualified to be listed in the bankruptcy filing. In which case no action pertaining to the vehicle can be taken until the bankruptcy proceedings are finished.
What is the process for resolving debt in court?
Resolving debt in court involves a legal process where a creditor files a lawsuit against a debtor to collect the owed amount. The court will review the case, and if the debt is proven, a judgment will be issued. The debtor may be required to pay the debt, negotiate a settlement, or declare bankruptcy to resolve the debt.
What does it mean when a creditor files a motion to release?
The creditor is asking to be excluded from the bankruptcy. If that is granted the debt will be valid and the creditor can resume collection action.
If my wife filed for personal bankruptcy are you responsible for her debt?
No you are not. When one spouse and not the other files for bankruptcy they are only doing so with regard to their personal debt. A debt is created by contract between a debtor and a creditor - each debtor must sign the contract to be liable for payment. Therefore, the bankruptcy of one spouse does not cause the other to become bankrupt. Debts where spouses are joint and severally liable for payment will remain with the spouse who has not filed for bankruptcy. Under Chapter 7 bankruptcy, where one spouse's debts are wiped clean, the creditor can go after the other spouse. However, a major advantage of Chapter 13 bankruptcy, where the debtor plans to re-pay her debts, is that the creditor will leave the co-debtor alone, as long as bankruptcy plan payments are timely deposited.
What happens when a creditor files a judgment against you?
The judgment can be executed according to the laws of the debtor's state. The preferred method is wage garnishment or bank account levy. In most cases it is also possible for a judgment creditor to execute the judgment to seize and sell non exempt property belonging to the debtor(s) or place a lien against real property. In very rare instances the judgment creditor can petition the court for a forced sale of a primary residence. That being the case, a homeowner should be aware of the status of the homestead exemption for their state of residency.
If you have a joint debt with another individual and only 1 individual files for bankruptcy will it appear on the other individual's credit report?
No, but the full amount of any joint debt will remain valid when included in an individual BK and the creditor can pursue collection from the non-filing debtor.
