I hold a second mortgage on a real estate property that I sold in 2004. In 2007, they stopped making mortgage payments. On September 4, 2004, the mortgagor filed for chapter 7 bankruptcy protection
. I tried to file a claim and the trustee
informed me that (1) I could not file a claim since the note was secured by real property and (2) It was not necessary to file a claim. At the time that he stopped making mortgage payments (Feb. 1, 2007) the principle was $143,358. From that date until the date of bankruptcy (Sept. 4, 2008}, there accumulated $42,738 in interest, late fees, and 18% penalty interest rate (according to the promissory note
). The total due on the bankruptcy date was then $186,096.
On October 21, 2008, the bankruptcy court
trustee filed a "Notice
and Report of the Trustee's Intent to Abandon Interest in Real Property". In this document the trustee states that she is abandoning the real property because the real property contains toxic waste and the environmental clean up costs exceed the value of the property.
It seems to me that the note is no longer secured by the real estate so that I should be able to file a claim....or....I should be able to file a claim for the accumulated interest and late charges.
Am I right and what do you recommend?