Good morning Angela, I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. I empathize with your situation, and unfortunately, this is a problem that many bankruptcy attorneys don't discuss with their clients---regarding the effect of mortgage liens after the bankruptcy. If the value of your house was less than the first mortgage and the HELOC at the time of your chapter 13, then the HELOC would have been stripped from the property and you would owe nothing now. Chapter 7 bankruptcy only discharges your debt to the lender---meaning that the lender cannot sue you in court and seek a judgment against you. Bankruptcy does not automatically give you the property free and clear of the lien claim of the lender though. When you file bankruptcy, you avoided the possibility of being sued for the debt, but the lien from the mortgage/HELOC may well have remained intact. If the HELOC remained intact, that means that they are entitled to be paid from the sale of your property if they had a deed of trust or trust deed on the house---BUT, only to the extent that their claimed debt was secured by the property at the time of the bankruptcy. Any unsecured debt---debt for which you did not pledge your property as collateral---would not be recoverable by the lender. Any unsecured debt from the chapter 13---if you finished the payments in that plan before filing chapter 7---would have been discharged, leaving only the possibility of secured debts being valid. However, if you did not finish paying the chapter 13 plan, and concerted to 7, any secured lien would still be viable as a lien on your property. I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so. If you have additional questions, you may of course reply back to me and I will be happy to continue to assist you further until your questions have been answered to your satisfaction.
Thank you, Doug
Hi - my name is XXXXX XXXXX I am a Bankruptcy and Consumer Protection attorney here to assist you.A Bankruptcy can automatically discharge debt, but cannot automatically remove liens that have already been placed on property. To have liens removed in a Bankruptcy, you have to file a separate "522(f) Lien Avoidance" motion with the Bankruptcy court. This is normally done before a Bankruptcy case is closed.However, if your Bankruptcy case has already been closed, and if you want the lien removed, you would have to: 1) file a motion with the Bankruptcy court to have the case re-opened, and then 2) file the 522(f) Lien Avoidance motion with the Bankruptcy court to have the lien removed.You should be able to get the necessary forms for these motions and instructions from the clerk at the Bankruptcy court.I think this is what you wanted to know. If not, please let me know.Thank you.
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