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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39183
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I purchased two Assisted Living Facilities in 2006 from an

Customer Question

I purchased two Assisted Living Facilities in 2006 from an unscrupulous doctor. The business failed in May 30, 2009, forcing me to close the doors of both facilities. I was forced to file a Chapter 7 Bankruptcy in September 2009. I received a discharge on November 17, 2009. I was instructed by my bankruptcy attorney to put my home (primary residence) into the bankruptcy because he said a judgment supersedes a bankruptcy. My lawyer told me that if I kept my home and sold it 10 years from now, I would first have to repay the bank, and then I would have to repay the doctor.

My attorney told me to stay in my home until the lenders issued me a Notice of Intent. He also described a program called “Cash for Keys” that the lenders have in place, which will give you money to transition to another location.

I have been in my home for approximately 20 months and have not yet received a Notice of Intent. I would like to know if the information my attorney provided to me is accurate.

My ex-business partner filed for bankruptcy in November of 2008, and she has reaffirmed her home. Is it too late for me to try to keep my house, and is the information that was given to me by the bankruptcy attorney accurate? Can someone please clarify this for me?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 7 years ago.

I don't know what your attorney or the other "expert" is talking about.


It is a fundamental principal of bankruptcy law that a Chapter 7 discharge does not affect a secured lender's interest in the debtor's principal residence. Bankr. Code §524(j).


The botXXXXX XXXXXne is that if you don't make your payments, the lender can foreclose, period, end of story.


Not what you wanted to read, I'm sure, but if you're paying for an answer, the least that you should expect is a correct answer.


If you believe you were poorly served by the other expert, you can email customer service at [email protected] and demand a refund of your $29.00, under the 100% satisfaction guarantee.


And, if you have other legal questions and you want a correct answer, with citations to relevant legal authority, feel free to contact me again.


Hope this helps.


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Customer: replied 7 years ago.
I would like to know why in the world did my attorney tell me to put my property into the bankruptcy? I thought I had to move out of my home and into an apartment. So in lay man's terms -- you are telling me that the doctor that (snake) can not come after me to get is money? I need to read this in English. I will keep the cited code you gave me but I tried to read it and it isn't clear to me what you are trying to tell me. I have been looking for apartments for at least a year now. This is (not) an easy pill for me to swallow. By the way, I did accept your answer and since you sound like you have more sense than everyone else I have spoken to -- I gave you a bonus!!!
Expert:  socrateaser replied 7 years ago.

I re-read your original post, and now I'm a bit confused myself. So, let's cover this once more, so that we're both certain that we're talking apples and apples. Please answer the following for me:


1. Are you late on any of your house payments, or is your loan current?


2. Did you give the doctor a lien/mortgage for these businesses secured by your principal residence?







Customer: replied 7 years ago.

I have not paid my mortgage in (20) months. When I was told by my attorney that is was best to put the house in the bankruptcy -- he said do not make any payments from this point on.


To the best of my knowledge -- we did (not) give the doctor a lien/mortgage secured by our personal residence.


My attorney explained to me since my primary residence was located in Baltimore, MD and one of the Assisted Living Facilities was located in Baltimore, MD that is why he felt my house was tangled up in this procedure. The doctor did file a complaint for confessionof judgement against the both of us.

Expert:  socrateaser replied 7 years ago.



My original answer is correct (unfortunately).


Listing your home in the bankruptcy was done so that if and when you are foreclosed, you would have no personal liability for any unpaid loan balance or "phantom" IRS income taxes. However, the lender can foreclose whenever it desires.


In short, you can continue to live in the property until the sheriff shows up to "help" you move. Or, you can walk away, and the lender can't touch you.


Being that the lender apparently is not interested in foreclosing, there's no particular reason not to hang out and save your money. Just realize that you are "renting" from the bank, unless your property value unexpectedly explodes upwards.


Also, if you don't pay the property taxes, then the county will foreclose and force you out. Finally, if you are in a homeowners association, and you are not paying those assessments, you will remain liable for them, regardless of your bankruptcy, because they are nondischargeable. Bankr. Code 523(a)(16).


Hope this helps.