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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 38440
Experience:  Attorney and Real Estate broker -- Retired (mostly)
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We have been fighting off a foreclosure years.

Customer Question

We have been fighting off a foreclosure for several years. We first hired "specialists" to get loan modification. These attorneys advised us to stop making payments as Wachovia had also advised us. We specifically said we did not want bankruptcy but that is exactly where they led us over the course of a year. Our bankruptcy was discharged. We eventually fired those guys and hired several others over the next few years. In that same period of time, Wachovia went bankrupt and we dealt with Wells Fargo. We attempted over and over to get a loan. One time they "approved" us but denied the house based on a property value formula that would result in costing the $60,000. Another time it did go to sale but there were no buyers. This winter/end of January, we paid a lawyer $7500 to help us as a just answer attorney suggested. We had two possible buyers and Wells Fargo delayed the sale. We finally got a offer on the table but it was last minute before the next sale date which was yesterday. Wells Fargo rejected that offer based on timing.
My question is; what if any charges can be leveled against us for deficiency? 1099's? Or other charges. I have researched online but cannot find anything specific to our situation;
bankruptcy discharged
foreclosed sale failed
rejected offer
We don't want to face another bankruptcy, we are not happy about the first one, nor can we afford a big hit on taxes. My husband is 76. We just want this behind us.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  socrateaser replied 1 year ago.
Hello, Was your bankruptcy a Chapter 7 or 13? If it was a Chapter 13, was the mortgage provided for (described in) the Chapter 13 plan?
Customer: replied 1 year ago.

Chapter 7 and yes the mortgage was included. It was the ONLY reason for bankruptcy and was pushed by the attorneys. We kept our truck out and paid it off within the year. We attempted to keep our sons motorcycle out but the attorney "made a mistake" and it got included, subsequently repossessed and also paid off in order to get it back.

Expert:  socrateaser replied 1 year ago.
If your loan was discharged in Chapter 7, then you are free of the debt obligation. That's the purpose of a bankruptcy. The lender can foreclose and take the property, but it cannot reach you for any deficiency.

Also, since the loan was discharged in Chapter 7, you will have no further tax liability (26 U.S.C. 108(a)(1)(A)).

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.

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