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I have potentially good and potentially bad news: The good news is that I do not see how your mortgages could have been wiped out in a Chapter 7. Yes, it is possible that the people who filed bankruptcy may have discharged their liability to pay the mortgages, but mortgages do normally stay attached to the real estate as a lien. Mortgages can generally only be stripped (i.e. completely wiped out) by motion in Chapter 13's under the right circumstances, but not in Chapter 7.
The bad news is that a "Notice of Chapter 7 Case Closed Without Discharge" doesn't normally do anything for the creditors. This just requires the people who filed bankruptcy to pay a fee to reopen their case to file the post-bankruptcy credit counseling certification, and then they will get a discharge. Even if they don't, the automatic stay will remain in effect, making collection impossible.
So, while I do not think a Notice of Chapter 7 Case Closed Without Discharge will do any good for a creditor, it is extremely uncommon for a mortgage to be wiped out in a Chapter 7.
I strongly suggest you take the documents you received from the Bankruptcy Court, the foreclosure action, and your mortgages to an attorney in your area for review. It is possible that you may be able to get money during the foreclosure sale if you do not sit on your rights. Of course, for you to get money the home will have to be worth more than the people owed on the first mortgage, which is very uncommon nowadays, but it is possible.
Sorry i don't have better news =( but I hope this helps and a positive feedback is always appreciated if this was useful to you.
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Sorry to hear that Sandy (sorry I called you Cynthia before due to your screen name), but generally if a first mortgage holder runs up the amount owed to more than a house can sell for, and the people who owed the money received a bankruptcy discharge, then junior mortgage holders are usually out of luck. I still suggest you have an attorney review your documents, but I would not be hopeful. You may at least be able to write off the loss on your taxes though.
If the people who filed bankruptcy want, they may reaffirm the debt with you, which is agree to pay it back. In this case, the people who filed bankruptcy (the debtors) sign a reaffirmation agreement saying they will pay back $x.xx in monthly installments of $x.xx, for xx months at xx% interest. The lender also signs it, and then it is filed with the bankruptcy court. This normally has to be filed before the discharge is entered. The debtors have a time period after discharge to cancel the agreement if they change their minds, but once the cancellation period ends, the debtors are legally required to pay the debt back according to the terms of the reaffirmation agreement.
As a practical matter, it is not normally a good idea for debtors to sign such an agreement since there is nothing in it for them, but sometimes if they are friends with the lender(s), they may do it to promote continued goodwill from the lender.
I have seen lenders ask the debtor's attorney to ask their clients to sign a reaffirmation agreement, usually without success but sometimes it works.
I *hate* giving bad news =(
If you feel like you were defrauded by Pavillion you may have a claim, but these types of claims are tough to win since of course the plaintiff usually signed something with fine print to the lender's advantage.
I'm like you though, I hate to just roll over and eat a loss. I would take your documents to an attorney for review, and tell them what representation Pavillion made to you. I honestly doubt if you will get anything but a tax write off out of this, but for $46,000 I would invest a couple hundred more to at least have an attorney review it. It may be throwing good money after bad, but $46,000 is a lot to eat.
I hate to keep saying "see a lawyer, see a lawyer," but I can't give advice online, only information, nor can I really review all of the documents. If it were me, I would at least spend a little more money seeing a lawyer to be sure if there is no way to collect anything. And no, I'm not just saying that to drum up business for my ilk, but because if there is not a way to collect anything, and like I said I doubt if there is, at least you can sleep at night because you will know you uncovered every stone and didn't just give up with potential options left unexplored. That might help with closure even if it doesn't result in money.
Again, I'm sorry to hear that happened to you. There is a big difference between filing bankruptcy on a huge multimillion dollar corporation an filing on a person who doesn't have money to burn.
No problem Sandy. I totally understand your losing sleep over this, it is very distressing. But if all you can get out of it is a write off on your taxes, try to put it behind you - it may have cost you money but don't let it cost you stress (I know, easier said than done).
Thank you for the bonus, I appreciate it.
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