Thank you for your question. I am happy to assist you.
If your mortgage was properly listed on your Chapter 7 petition and you did not reaffirm the debt, you are not personally liable for it. A subsequent Chapter 13 will not effect your liability under the mortgage note.
Therefore, you will not be liable for any deficiency on the mortgage if you listed it in your Chapter 7 and did not reaffirm.
I hope that the information which I provided was helpful to you.
Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.
THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE
Unforunately Tennessee does permit deficiency judgments. Thus your deficiency will need to be added to your Chapter 13 plan.
An alternative to the deficiency judgment may be a "deed in lieu of foreclosure".
This procedure allows you to transfer your property voluntarily to your lender or Mortgage Company and your debt or deficiency is often forgiven.
With a deed in lieu of foreclosure a borrower whose mortgage is in default voluntarily transfers title to the mortgaged property to the lender rather than forcing the lender to engage in a long and costly foreclosure action. The lender must consent to the transfer.
There are various reasons why a lender would not agree to accept a deed in lieu of foreclosure. For example, if it appears that the borrower has the resources available to cover any deficiency that may result most lenders will refuse to forgo the ability to collect the deficiency. Also, if the borrower is current in his payments, the lender has no incentive to negotiate.
If a deed in lieu of foreclosure is the route you decide to take, I suggest that you write to the lender or lender's attorney by certified mail, RRR and request this process.
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