Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.
No, the lender cannot and will not treat you differently just because you filed for bankruptcy. The lender may or may not initiate the foreclosure solely based on whether you are in default and nothing else. The fact that you did not reaffirm your mortgage is irrelevant and it is actually a good thing because if down the road you decide that inspite of your best efforts that you can no longer afford the house, then you can just walk away without worrying about whether the lender would come after you for the deficiency after the foreclosure sale. Without reaffirming the loan, your personal obligation on the Note has been discharged in bankruptcy. Thus, if the lender forecloses, the lender would only get the proceeds from the sale and cannot come after you for the deficiency.
Thank you for your reply. To clarify, if the bank sees us in default, might they choose to move faster on foreclosure because we filed bankruptcy? For example, say the bank's standard foreclosure starts 6 months of continuous delinquency. Might they start the foreclosure earlier, say after only 3 months of continuous delinquency?
Response 1: No. As previously stated, the fact that you had filed for bankruptcy is irrelevant.
Also, is there a way to find out a bank's policy regarding foreclosure process? Sorry if my questions seem redundant, I just want to make sure I understand.
Response 2: No, there is no way. However, the bank must follow the foreclosure process in your State which requires that a notice of intend to foreclose and the foreclosure date be provided to the borrower.