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A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4300
Experience:  Experienced consumer bankruptcy attorney.
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I received a letter that my condo will be forecloused on March

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I received a letter that my condo will be forecloused on March 6. I filed chapter 7 on March 7. I ws recently told that the condo association ownes my property. I dont wnat to be thrown out on the streets.....what can i do....i didnt received anything saying the property was sold.........
Hello and thank you for your question.

You should have received notice that this was pending. Have you been able to check with the county to see the status of the foreclosure?
Customer: replied 3 years ago.

No I have not. But what do I need to do to stay in my home.......I have a meeting with my creditors next week...should I take my condo of the lists of items for bankrupcy...would that help.......

I want you to recieve the best possible answer to your question. I am going to transfer the question to a Bankruptcy expert.

Thank you.
Hello, and thank you for contacting Just Answer. My name isXXXXX am a bankruptcy law professional and I look forward to answering your question this evening.

Here is the good news, a bankruptcy filing should in the very short term stop any creditor, including a lender who has a secured interest in your property, from taking action to collect, including foreclosure. Filing a bankruptcy petition puts in to place an automatic stay of action on any creditors trying to collect on a debt, including trying to seize property on a secured debt through foreclosure. So, in the very short term (we're talking possibly a few months), a bankruptcy should stop a foreclosure.

Now, here is the bad news. If you are behind on mortgage payments, chapter 7 bankruptcy will not help you keep your property. Generally the mechanism under the law to keep real property (such as a condo) in a chapter 7 bankruptcy is to "reaffirm" the debt, meaning to sign a new agreement with the lender agreeing that you will continue to pay on the debt even after bankruptcy. The problem here is that if you are already well behind, the lender is not obligated to reaffirm the debt and, even if they are willing, if you are too far behind the court may not approve the reaffirmation. While the chapter 7 bankruptcy will wipe out the underlying debt on the condo, it does not prevent the creditor from foreclosing on the home, they still have a right to do that, once the bankruptcy stay has been lifted at the close of the bankruptcy proceedings.

Further, you cannot take a home mortgage or loan off of the list of debts in a chapter 7 bankruptcy, you are required to list all of your outstanding debts, both unsecured, such as credit card debt, or secured, such as a home mortgage or car loan. All debts must be listed.

So, unfortunately, the only way to make sure that a home is kept in bankruptcy is to reaffirm the debt on the home. If you do not have an attorney representing you, you can contact the creditor who holds the loan to see if they will reaffirm. Keep in mind that if you are too far behind on the debt, they may not be willing, and even if they are the court may not approve it, but it is worth checking with the creditor.

Now, if the condo association somehow had already seized ownership of the property (which it is correct that you should have received notice of a court date for this), it may be a moot point. You may want to check with the clerk of court for the county in which you reside, to see if there was ever a foreclosure case filed against you and if the court issued a judgment giving the property to the condo association (presumably for unpaid condo dues, or something of that nature). In either event, at this point it may be too late to save the home. I wish I had better news for you, and at the very least in a chapter 7 bankruptcy all of the debt will be wiped out.

I appreciate the opportunity to answer your question, and please let me know if you have any additional questions or need clarification of anything I have said (never be afraid to ask for clarification!). Otherwise, please remember to RATE my answer positively so that I can receive credit for my work. Please also remember that I have an obligation to provide honest information, and that even where the news is bad, I have an obligation to provide bad news honestly.
A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4300
Experience: Experienced consumer bankruptcy attorney.
A.J. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.

will I be able to negotiate with assoication.....I need to stay in my home. what is my next step...I meet with a the crediors next week in court so you are telling me there is no point of me taking it off the list.......there has to be a way of me staying in my home.....i cant just pack up and leave...

You may be able to negotiate with the association, but they are not obligated to negotiate with you (if they do actually hold title to the propoerty at this point) was my point. Generally, however, negotiating with creditors is something that is attempted prior to the bankruptcy. Other than reaffirming a secured debt, a creditor really is not even supposed to discuss a debt with a bankruptcy debtor, because it could be construed as trying to collect a debt, which is not allowed under the bankruptcy stay. Certainly attempting to work something out with the condo association may work, but do not be surprised if your efforts are turned back, unfortunately a creditor is not under any obligation to work something out with you, and once a bankruptcy petition has been filed they may not even be allowed to (again, unless this is a secured debt that can be brought up to date before the close of the bankruptcy case).

As for taking a debt off of the "list", it is not that there is no point, it is that you are obligated to list all of your debts, you are required to include every outstanding debt, you do not get to pick and choose which debts you will include in a chapter 7 bankruptcy (I wish that were true, it would save a lot of people a lot of headaches).

Now, one other thing to be aware of, if by meeting with creditors in court you mean your section 341 meeting of creditors, do not actually expect your creditors to appear for this. What happens during this meeting is that the bankruptcy trustee assigned to your case will ask questions to see if you have any assets that could be seized to pay creditors. Very rarely do creditors actually appear to ask questions (I have never actually seen it happen, but I imagine it does from time to time). So, if this is the meeting of creditors that you are referring to, then this is not generally an opportunity to negotiate with creditors (I am not sure why Congress decided to call it a "meeting of creditors" as it in no way reflects what actually happens).

In a chapter 7, the only formal way under tha bankrtupcy code to prevent a creditor from foreclosing is to reaffirm that debt, and if you are well behind on the debt, or if the foreclosure has taken place, this may not be possible. I am not trying to be a naysayer, but am trying to provide accurate information. I would again suggest that you contact a bankruptcy attorney in your area to assist you if at all possible. Although I fear that they are going to give you the same answer that I am, it may be that they are able to help convince a creditor to reaffirm a debt. You are certainly also free to contact a creditor that holds a secured mortgage on the home directly to see if it can be reaffirmed, however, if the home has already been foreclosed on and the condo association or your mortgage lender already owns the home, this may be a moot point. I do wish that I had better news for you, and let me know if you have any additional questions or need clarification.
Customer: replied 3 years ago.

its jsut hard for me to believe I just loose my house just like there any loop holes

I know it's hard to believe, and it may not be "just like that", foreclosures can take a long time, occasionally even taking years, but that is not something to count on. Also, it should not have just happened, you should have been served notice of the foreclosure action and had a chance to respond in court, and if that did not happen, you could certainly file a motion to try and have a foreclosure judgment overturned, on the grounds that you were not served with the original complaint or given an opportunity to respond (Which is required in any legal proceeding). So that would be one loophole, once the bankruptcy is resolved, trying to attack a foreclosure judgment (if there is one, you would need to check with the clerk of court for the county court in which the home is located) on the grounds that you never were served a summons and complaint to respond to. Other than that, however, generally no, there are not loopholes, particularly not in bankruptcy where the creditor holds a secured debt and the debtor is behind on the debt. Bankruptcy is ultimately set up to eliminate debt, not to protect an individuals property. While there are some protections built in to the current bankruptcy system, where you go in to a chapter 7 bankruptcy very behind on a secured debt and it is the creditor's intention to foreclose, the debtor is very limited in their options.

Again, this becomes a moot point if the foreclosure was completed prior to the bankruptcy, in which case someone else would already own the home, and you could try and attack the foreclosure on the grounds that you did not receive notice of the proceedings (called service of process) as required by law. That, however, is the only loophole I can think of based on the information you have provided.

I do wish I had better news for you, and I would still encourage you to sit down with a bankruptcy attorney licensed in your state if at all possible, as they may be able to work something out with the mortgage lender or the condo association (it may be a long shot, but you never know).