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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Decleared Bankruptcy and it was discharded May 2010. I had

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Decleared Bankruptcy and it was discharded May 2010. I had a apartment building with about 500k in loans that were included in bk chapter 7. I went to my old RE brokers office and found recent mail from bank. Statements showing a zero balance but my name still on it. Also, the city property search shows me still the owner. In my BK we instructed to the bank to take the property. IF i am still the owner of the property and the bank has written off the debt. Could I legal sell the property since they didnt take it and the loan is gone?? if Not...what do i do..I went by and it looks like squatters are living in there...if someone gets hurt I dont want to be responsible etc.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
Even though the mortgage was discharged in your Bankruptcy, you continue to own the property until it is sold at a foreclosure sale. The bank has not cancelled the debt - they have to show a zero balance due because they cannot legally collect that money from you.
Since you still own the property, you can sell the property, but you have to satisfy the lien that is still on the property, and which cannot be removed in a Bankruptcy.
You can contact the bank to find out how much money they want to remove the lien, and then you can sell the property as long as you can sell it for enough to pay off the lien.
Since you still own the property, you also still have the right to collect the rent. If there are squatters, you can have them evicted.

I think this is what you wanted to know. If not, please let me know.
Thank you.
Customer: replied 5 years ago.
The lien would be well over what it is worth. I had another property that the bank just took it quickly, its been over a year, I would think my BK lawyer should have made sure this was done.....

To clarify, cant the bank "take" the property at anytime? Why would they not take the property in the BK?
If I do rent the property out I don't have to make payments to the bank then?
Expert:  cfortunato replied 5 years ago.

Although the lien is more than the value of the property, the bank has the ability to accept less than the value to remove it - this is similar to a short sale.

Contrary to what many think, it is not a Bankruptcy attorney's responsibility to make sure property is sold, especially since there is absolutely nothing that can be done to "force" a bank to foreclose and sell property.

The bank can foreclose (not "take") the property at any time - but they must first go to court for a foreclosure proceeding, which can easily take years. Most banks have many mortgages that need to be foreclosed, and they are having a hard time keeping up with the backlog. Additionally, they know the housing market is currently depressed, so there is no rush to have foreclosure sales, as few are buying in these sales.

Even if you rent the property, you still do not have to pay the bank.

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