Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Ok yes I am fairly confused. =) Not sure what you mean by "PROVIDED" for? Here's what happened. When we filed Ch 13 we put the "arrears" of the 2nd mortgage in our Ch 13 but were supposed to continue to pay the monthly payments to them, just the arrears when into the 13. Well we didn't keep up with them and they charged off the account. So, can they foreclose on us or give us an opportunity to pay something? Perhaps negotiate a "settlement" amount. Clearly our house is underwater. The 2nd holder's mortgage is 70,000. Our 1st mortgage is probably just about covered with the value of our home right now, in a year they might have 10,000 in equity if lucky. What would we do?
Not sure what you mean by "PROVIDED" for?A: Means that the 2nd mortgage is to be paid or expressly denied payment, as stated in the Ch. 13 plan.Here's what happened. When we filed Ch 13 we put the "arrears" of the 2nd mortgage in our Ch 13 but were supposed to continue to pay the monthly payments to them, just the arrears when into the 13.A: Then the 2nd was not provided for, which means it won't be discharged when your Ch. 13 plan is completed.Well we didn't keep up with them and they charged off the account. So, can they foreclose on us or give us an opportunity to pay something?A: The creditor can foreclose, regardless of whether or not you filed bankruptcy, and whether or not you provided for the loan in the Ch. 13 plan. The creditor's secured interest in the property survives bankruptcy. Only your personal obligation to pay the debt is discharged. However, where there is no equity in the property, there is no point in foreclosing, because there's no money to be recovered. Consequently, your creditor has only one option: charge off the loan and then sell it to a debt collector.The debt collector can sue you for the unpaid debt, because it was not provided for in your Ch. 13. That won't cause a foreclosure -- it would give the debt collector the authority to garnish your wages to pay the debt over time. Though, many times, debt collectors don't sue, because the debtor doesn't have sufficient income to make it worth the legal fees involved. So, you may escape further legal action.Perhaps negotiate a "settlement" amount. Clearly our house is underwater. The 2nd holder's mortgage is 70,000. Our 1st mortgage is probably just about covered with the value of our home right now, in a year they might have 10,000 in equity if lucky. What would we do?A: At the time when you filed for Ch. 13, "lienstripping" of a 2nd mortgage from a principal residence was not permitted by MN bankruptcy courts. However, that law has changed (see, e.g., In re Atkins, 497 B.R. 568 (USBC MN 2013)). Consequently, you could conceivably ask the bankruptcy court to permit you to strip off the 2nd mortgage. This would completely wipe out the 2nd mortgage -- it would cease to exist, when your Ch. 13 ends -- and the creditor could not foreclose. You would only have a 1st mortgage remaining.
You would need a bankruptcy attorney to handle this for you, but it's a possibility that did not exist when you original filed, so I would encourage you to investigate this possibility.If you cannot strip off the lien, then all you can do is wait. If you're not sued within six years of the date that your Ch. 13 ends and the automatic stay is lifted, then you would escape under the MN statute of limitations for breach of contract.Those are the possibilities. Hope this helps.
Ok then one last ? Do we have to file Ch 13 all over again or can we ask our bankruptcy atty to lienstrip it in the one we have filed?
This is what I got back from my lawyer???? Is this true??
There are a lot of legal issues here, some of which may not be determined without reviewing the Ch. 13 plan language, itself.What I know, for absolute certain is that the Atkins were able to accomplish the lienstrip after their Chapter 13 plan was already completed and closed! Here's a link to the case, so that you can review it for yourself.Also, if you cannot strip the lien in the current case, then you may want to consider dismissing the case and then filing a new Chapter 13. Obviously this would increase the length of your bankruptcy -- but if that would permit you to strip the lien, then it may be worth the hassle.I don't want to get into an academic argument with your attorney. You can offer to pay her for a "memorandum of law" on the question of stripping the lien, now that the law has changed. That may be the only way you will get something more useful than the unequivocal answer you have so far received.
Personally, I think that the question is not subject to an instant "yes" or "no" response -- but, I'm not your lawyer, and I don't know all of the case details -- so, there's no way that I can take a conclusive position on whether or not the lienstrip is possible in your unique circumstances.I'm really not trying to "duck the question" here. The issue is very complicated.Hope this helps.
Our bankruptcy atty won't file a new Ch 13 he told us we would have to go thru a different atty. Is it an option with this for us to hire just a real estate atty to file to the courts to strip that loan? Looks like the Atkins did that?
No Tracy works there, my attorney is Curtis Walker?
That's my question. How do i pay for that memorandum of law? Not clear on what that means. '
As far as our atty, he just basically said that closing a 13 case and filing a new one makes his law firm look bad so another atty would have to do it.
I just did. -) Thank you so much. Your input is helping me however. Are you are saying I should be able to type a written brief to my lawyer and he can look into it....
We are now out of our Ch 13 and that 2nd mortgage is lingering and we are worried they are going to come after us for it. They are aware we are not protected by 13 anymore. The balance on the loan is 70,000 and now, our first mtg is NOT underwater with the economy the way it is but we certainly don't have 70,000 in equity. We might have 40,000? What do we do or should we just sit and wait? Is there a statue of limitations when they can't come after us and have to release the lien?
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).