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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
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Experience:  JD, MBA
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California Bankruptcy Law Wife owns home that husband and

Resolved Question:

California Bankruptcy Law

Wife owns home that husband and kids live in. Wife choose to include home in bankruptcy. Appears this was stupid because it accelerated bank receiving back the home.

Husband is VERY mad that she made this decision w/out talking to him. When a home is included in bankruptcy what is the process? Is there a specific date the home keys are given to the bank? Will the bank still have to file a notice of default?

BotXXXXX XXXXXne: Husband wants to stay in home as long as possible. Since husband is resident is he required 60 or 90 day notice from bank to move out?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 5 years ago.
Hello and thank you for allowing me the opportunity to assist you.

When a party files for bankruptcy, all debts and assets must be included in the bankruptcy filing. Therefore, the wife had no choice in the matter. If she wants to keep the home, then she can continue making mortgage payments so that the lender has no reason to foreclose. If the lender wants to foreclose anyway, then she can sign a reaffirmation agreement, which is an agreement that the mortgage will not be discharged, and continue to pay the mortgage.

If the mortgage is not paid, then the lender can continue with the foreclosure process once it files a motion to lift the automatic stay. In plain English, that means the lender has to get permission from the court to foreclose. If the mortgage is not being paid, and if there is no equity in the home, then the court will likely grant the lender's motion and allow the foreclosure to proceed. From that point on, the rest of the foreclosure process is that same as if there were no bankruptcy. The same notices must be sent, and the home must be auctioned in the same way.

The botXXXXX XXXXXne is that the husband has no reason to be angry with the wife. In fact, if anything, the bankruptcy probably delayed the foreclosure since everything is the same, except the lender now needs to court's permission to continue. If the lender would have worked to modify the loan prior to the bankruptcy, then it will likely agree to modify it now regardless of the bankruptcy. I don't see the bankruptcy as hurting the husband's position at all.

Have I satisfactorily addressed your concerns? If not, then feel free to let me know, as I will be happy to clarify my answer or help with your follow-up questions. In the meantime, please remember to click the green accept button so that I will receive credit and compensation for my time (doing so does not end our session). Positive feedback is always appreciated as well. Thank you and good luck!
Customer: replied 5 years ago.

Okay I see. It was husbands understanding that w/ home included in bankruptcy meant court order home to be immediatley OR on a certain date to be given back to lender.

 

It sound like your saying that understand isn't true. Your saying lending doesn't get court order to take home back on certain date ONLY that lender can proceed w/ forclosure process. So lender in California will still have to file notice of default 90 days, plus 21 days minimum to even do auction.

 

Okay so bankruptcy actually helped. Please confirm one final time.

Expert:  TJ, Esq. replied 5 years ago.
Hi again.

"It sound like your saying that understand isn't true. Your saying lending doesn't get court order to take home back on certain date ONLY that lender can proceed w/ foreclosure process. So lender in California will still have to file notice of default 90 days, plus 21 days minimum to even do auction."

Exactly. The bankruptcy court is NOT going to order that the house be immediately turned over. In fact, in some cases (depending on the facts, of course), a mortgage can be included and discharged, and yet there is no foreclosure at all. So, the bankruptcy did not hurt.

I hope that helps. Please remember to click "accept."
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