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Tina
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 32386
Experience:  17 years of legal experience including real estate law.
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Im two years into a chapter 7 bankruptcy where the loan on

Resolved Question:

I'm two years into a chapter 7 bankruptcy where the loan on my mortgage is showing as having been discharged on my credit report. I'm still making my monthly payments but now am being put into a position where I have to move out of state. The house is upside down and in need of repairs and in that I'm basically just paying rent anymore and there exists no hope of selling, can I just leave without any fear of legal action down the road?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Tina replied 1 year ago.

Hello and welcome.

My name is XXXXX XXXXX my goal is to provide you with excellent service today. I am sorry to hear of your difficult situation. Before I can give you an accurate answer to your question, please provide the following additional information:

Do you have a copy of the court order from the bankruptcy court discharging the debt? Do you have a second mortgage on the property? If so, was it discharged as well?

I look forward to assisting you as soon as I have received this information. Thank you.

Customer: replied 1 year ago.

I don't physically have the paperwork in front of me now but yes, the debt was discharged and yes the second mortgage as well.

Expert:  Tina replied 1 year ago.
OK. Thank you for clarifying that for me, Frank.

Since the debts were discharged in bankruptcy and you did not reaffirm the debts, you would not typically have any further obligation on the loans. The lenders may have decided not to foreclose on the property because you continued to pay on the loans, but as long as you did not sign anything indicating you were reaffirming the debts, you could normally walk away from the property and have no further obligation on the discharged loans.

Bankruptcy typically discharges your personal obligation to repay the loan although it does not discharge the lien the lender has on the property, so they can foreclose on the property after you default and recover the value of the property which would typically be applied to the debt, but they cannot typically pursue a judgment for the balance of the loan (if any) following a sale at auction where the debts have been discharged but not reaffirmed.

Here is a link which discusses the effect a bankruptcy has on a mortgage loan (pursuant to federal bankruptcy laws):

http://www.nolo.com/legal-encyclopedia/filing-chapter-7-get-rid-mortgage.html

I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need so I will be compensated for my time from the deposit you posted with this website. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Tina


Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 32386
Experience: 17 years of legal experience including real estate law.
Tina and 3 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

Thanks Tina. Am I under any obligation to the lender to notify them of my intent...or do I just leave the keys on the table and go?

Expert:  Tina replied 1 year ago.
Hello again, Frank.

No, you are under no legal obligation to the lender to notify them of your intent to default typically, but you may wish to notify them so they can take possession of the property and not permit it to be looted. That is up to you though.

You are very welcome and good luck to you!
Expert:  Tina replied 1 year ago.

Thank you very much for your positive rating of my service. It has been my pleasure to assist you and I hope you will ask for me should a future legal need arise.

If you receive a Customer Satisfaction Survey from JustAnswer, please consider scoring me a 9 or 10. It benefits my ability to assist you and other customers, and would be tremendously appreciated.

Thanks again and all the best to you.

Tina

Note: Please feel free to request me if you have future legal questions by typing your new question in the question box on my profile page. Here is a link to that page, which you can bookmark or add to your favorites: http://www.justanswer.com/law/expert-tina/. I look forward to hearing from you again should the need arise.

Customer: replied 1 year ago.

Thanks again Tina...this has been chewing at my brain...at least now I have some direction.

Expert:  Tina replied 1 year ago.
I'm so glad I could help put your mind at ease, Frank. You are very welcome. Take care.
Customer: replied 1 year ago.

Hi Tina,


Another question for you on this subject. After I leave, am I under any obligation to maintain homeowners insurance?

Expert:  Tina replied 1 year ago.
No there is typically no legal obligation to maintain homeowner's insurance but if the property were to be destroyed, you could be obligated to the lender for a much greater deficiency, so it would normally be in your best interest to do so. Taxes also should be kept current since you can be held personally liable for any delinquent taxes.


I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need so I will be compensated for my time from the deposit you posted with this website. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Tina

Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 32386
Experience: 17 years of legal experience including real estate law.
Tina and 3 other Real Estate Law Specialists are ready to help you

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