How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ellen Your Own Question
Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
9968427
Type Your Bankruptcy Law Question Here...
Ellen is online now
A new question is answered every 9 seconds

My wife and I filed a chapter 7 bankruptcy in 2005, ...

Resolved Question:

My wife and I filed a chapter 7 bankruptcy in 2005, discharged. We are now facing a foreclosure and considering a chapter 13 to consolidate credit card and auto debt. If we file a 13, will we be responsible for any deficit on the home being sold as we do not intend or are we able to keep the home?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 8 years ago.

Hello,

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.

Thank you,

THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Customer: replied 8 years ago.
Reply toCustomers Post: The mortgage we currently have was not a part of the previous bankruptcy, and was not discharged under the chapter 7 bankruptcy. This mortgage came after the discharge in 2005, so our question has no relation to the previous filing. So, if we file a chapter 134 now, and the house is not going to be kept, will we be responsible for any deficit on the home once it is sold?
Expert:  Ellen replied 8 years ago.
What state is the house located in?
Customer: replied 8 years ago.
The house is located in Tennessee.
Expert:  Ellen replied 8 years ago.

Hello,

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.

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.

Thank you,

THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Ellen and 3 other Bankruptcy Law Specialists are ready to help you

Related Bankruptcy Law Questions