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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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Can my 1st mortgage (Wells) and 2nd mortgage (Suntrust) holders

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Can my 1st mortgage (Wells) and 2nd mortgage (Suntrust) holders foreclose my Homestead when it is owned by tenancy by entireties and only one spouse filed Chapter 7?

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Once a bankruptcy is filed, the automatic stay of the bankruptcy court is in effect under Bankruptcy Code 362. Therefore while the spouse is in bankruptcy the mortgages may not be foreclosed absent bankruptcy court permission. After the bankruptcy is closed, the lenders may foreclose if the mortgage is in default
Customer: replied 6 years ago.

If I do not reaffirm the 1st or 2nd mortgage but continue to make timely payments, will either lending institution still reserve the right to foreclose on my jointly-owned house? (The house value is sufficient to payoff both of the mortgages plus $50,000 gain for me and my spouse.)


Provided you are not in default, they cannot foreclose if you do not reaffirm
Ellen and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
If I reaffirm but subsequently fall behind one or two-months in mortgage payments, can they foreclose? (I will send you a $15 bonus for answering this follow-up question).
Customer: replied 6 years ago.
Shall I submit this follow-up question as a new question?
I was off-line when you posted.

The lienholders can foreclose after the bankruptcy is closed if you fall behind on the mortgage payments.

The chapter 7 bankruptcy would typically discharge your personal liability on the mortgages but the liens on the property remain. This means if the property were to be foreclosed, the lender could sell the property to satisfy the debt but could not obtain a judgment against you for the unsatisfied portion of the debt.
Customer: replied 6 years ago.
So are you saying that if I remain current on my mortgage payments, the lienholders, in particular my second mortgage/home equity lender, would not be able to foreclose on my house despite the fact that the market value is greater than all of the loan amounts owed to the banks/lenders?
Yes that is correct