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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 13126
Experience:  B.A.; M.B.A.; J.D.
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We filed chapter 7 it was discharged in 8/2012. This is my

Customer Question

We filed chapter 7 it was discharged in 8/2012. This is my question. We decided during the filing for chapter 7 to keep the house, Recently we were offered a modification loan (from our mortgage company - Bank of America) which if we go through with it it will take place in October 2012. We decided we do not want to stay in our home after all due to costly work that needs to be done to our home. The repairs are way to costly and we were considering walking away or selling our house in a quick sell. The other problem is that my father is cosigner on our loan. Is this going to effect him if we walk away from the home and let it go in foreclosure? Or can we sell or my father still sell the home.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 2 years ago.
Thank you for giving me the opportunity to assist you. Kindly use CONTINUE or REPLY button to ask for clarification or follow-up questions.


Could you clarify this statement?

"Or can we sell or my father still sell the home."


Did you reaffirm the mortgage in your Chapter7?


Did your father also file for bankruptcy protection?
Customer: replied 2 years ago.
No we did not reaffirm the mortgage in chapter 7.
No my father did not file for bankruptcy protection

we need to know if we can still sell our home even though we filed chapter 7. Or is my father still liable for the home if we let it go into foreclosure then if is he liable can he sell the home?
Customer: replied 2 years ago.


You replied




Saturday, August 11, 2012 2:51 PM EST




No we did not reaffirm the mortgage in chapter 7.
No my father did not file for bankruptcy protection

we need to know if we can still sell our home even though we filed chapter 7. Or is my father still liable for the home if we let it go into foreclosure then if is he liable can he sell the home?
Expert:  Phillips Esq. replied 2 years ago.

Thank you for the clarification:


No we did not reaffirm the mortgage in chapter 7.
No my father did not file for bankruptcy protection

we need to know if we can still sell our home even though we filed chapter 7.




Response 1: Yes, you can. Even if your mortgage was discharged in bankruptcy, you are still the legal owner of the property until the bank forecloses on the property. However, if you are selling the house on a short-sale, you would need the lender's approval.





Or is my father still liable for the home if we let it go into foreclosure then if is he liable
can he sell the home?






Response 2: Since your father did not file for bankruptcy protection, he is the only one now liable for the mortgage because your obligation on the Note was discharged in your bankruptcy. If the house is foreclosed, the lender can go after your father for the deficiency.




If your father is joint owner of the property, he can sell the house. However, as a joint owner he cannot sell the house without your consent, without the other joint owner’s consent. All joint owners’ signatures are required for the sale. All joint owners must sign the Deed. If your father is just on the loan but not on the title, not on the Deed, then your father does not have any right to sell the house because he is not a joint owner of the property. He is not the legal owner of the property despite him being a co-signer on the loan.

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 13126
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 2 years ago.
so to clarify my dad is on the deed. so if we agree to have him quick sell the house do we still need the mortgage companies approval?
Expert:  Phillips Esq. replied 2 years ago.
You mean short-sale the property?
Customer: replied 2 years ago.
yes short sale
Expert:  Phillips Esq. replied 2 years ago.

Thank you for your quick response:


You mean short-sale the property?

yes short sale



Your Question: so to clarify my dad is on the deed. so if we agree to have him quick sell the house do we still need the mortgage companies approval?




Response: Yes. You cannot short-sell the property without the lender's approval. In a short-sale, you are selling the property for less than the mortgage on the property. So, the mortgage holder who is going to be impacted must be notified of the sale and approve of it before the sale can go through. That is the only way the lender can release the mortgage on the property. Otherwise, the Buyer would be stuck with the mortgage. In any event, no title company would approve of the sale. No buyer would purchase the property where there is a mortgage on the property if the Seller is not going to be paying off the mortgage as part of the sale.

When the lender approves a short-sale, the lender is basically saying that it would take the sale proceeds as pay-off for the mortgage and the Buyer would get the property free and clear of the mortgage although in some instances, some lenders would approve the short-sale only on the condition that the Seller pay additional $5,000.00 to $20,000.00 to the lender. You should not agree to this. You would want a written agreement from the lender that it would take the sale proceeds as pay-off for the loan and the lender would not come after your father for additional money after the short-sale.

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