Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
I filed a Ch 7 BK last year and in July 2012 debts discharged . The home equity(2cd ) was one of those debts listed on the BK . We are currently in trial loan modification for our First Mortgage with Chase. The 2cd is also with Chase. I recently recieved a call from Chase Home equity dept stating I had not made a payment (203.00/mo) on second since last July 2012. The [payment was on auto pay for past 5 yrs so this was a surprise to me! .I guess have been so preoccupied with dealing with the paper work from loan mod process, I never noticed Chase stopped taking out payment of 203.00 every month. My question is : Is it common for the BK court to have instructed Chase to stop my auto pay for home equity and/or discharge the debt. ? When I inquired today as to who instructed Chase to stop deducting auto payments, they would not respond. Thanks Response: Bankruptcy Court does not "instruct" creditors per se to stop auto payments or to discharge debts. However, upon the debtor's bankruptcy filing, Bankruptcy Code’s Automatic Stay goes in effect and freezes all collection actions on most debts. Auto withdrawal is a collection of debt. This means that once Chase received a notice of your bankruptcy filing, Chase immediately stopped the auto payments to avoid the violation of the Automatic Stay, which carries stiff penalties and sanctions. See 11 U.S.C. Section 362 especially subsections (a) and (k). In order to restart the auto payments, you should have called Chase to reauthorize the auto payments. Even then and most often, Chase would not accept the reauthorization until after the closing of your bankruptcy case. So, you would have had to make payments manually every month to Chase. Regrettably, you were responsible to monitor your account to ensure that payments were being made. All debts properly listed on your bankruptcy schedules would be discharged upon issue of Discharge Order from the Court subject to certain exceptions. Debts for child support, alimony and most taxes and other obligations to a governmental unit such as penalties and fines are not discharged. See 11 U.S.C. Section 523 and Section 727. The notice of Discharge—the Discharge Order is sent to all creditors listed on your Schedules and the discharged debts would most often be correctly listed on your credit report as being discharged in bankruptcy. You would then dispute any debt that is not correctly listed as being discharged with the credit reporting bureaus so that the accounts can be correctly listed.
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).