The intention is to postpone the foreclosure sale. We are aware it is possible to file for an extention but aren't sure just what that would entail. My brother is considering filing for the extension now instead of waiting til near the 15 day prior-to-auction date for filing intent to cure. My brother was considering filing for bankruptcy personally prior to the development of his role as executor because of his own debt issues. Since he is an executor the question arose as to the impact on the estate, if any, should he file while he is the executor of an estate. But I see from your response that he cannot file as an executor which implies an answer to the impact on the estate should he file personally. Just yesterday my brother revealed that my mother had debts beyond the reverse mortgage (credit card and hospital even though she was on medicaid). So we are wondering if there is a way to discharge any of her debts or if they must be paid through the estate until all are paid or the funds available through the estate run out before all debt is paid.
Thank you for your response.If your brother files a Bankruptcy for himself, the foreclosure process will be affected by the automatic stay that goes into effect as soon as a Bankruptcy is filed. To continue with the foreclosure, the lender would have to file a costly motion requesting the Bankruptcy court for relief from the automatic stay, or they would have to wait until your brother's Bankruptcy case is discharged or closed (usually 4-6 months after the case is filed).The reason the foreclosure would be affected is not because your brother is the executor, but because your brother has a personal interest in the property - which might have to be surrendered to the Bankruptcy court (his interest only).
However, your brother's duties as a executor would not be affected by his Bankruptcy filing.Yes, your mother's debts would have to be paid from the home's equity (the difference between the home's current value, and the balance on the reverse mortgage).It is also not possible for an estate to file a Bankruptcy. In other words, unfortunately, it would not be possible to discharge your mother's debts in a Bankruptcy.
Thank you for your response. It was very helpful and gave us the answers we need. I notice above this reply box it says "don't forget to press the green accept button." I don't specifically see a green accept button but I would rate your responses as timely and complete and would consider your service as excellent. I will go ahead and click on the rating button that seems to be connected to a response by J.Warren to my initial question of which he passed along because it was not about estate law. It will be "excellent" and applies to you as well as him. Thank you again. You will likely hear from me again. I am trying to help my brother who does not have a computer so he cannot use this service directly.
Reading again your answer, I do have another question. We understand that filing for foreclosure by the lender will result in the addition of the legal fees for doing so to the amount owed to the lender for the reverse mortgage. Would the costly fees to file a motion for relief also be passed along to the estate thus not discouraging the lender from filing the motion?
Thank you for the excellent rating.The cost to file a Motion for Relief from the Automatic Stay would normally not be allowed to be passed to the estate, unless the lender had a good reason for filing the motion instead of waiting the 4-6 months until the Bankruptcy case is discharged. (A good reason would be the property will be worth significantly less if the lender has to wait.)
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).