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Barrister
Barrister, Attorney
Category: Legal
Satisfied Customers: 37862
Experience:  16 yrs practice, Civil, Criminal, Domestic, Realtor, Landlord 26 yrs
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I WENT THRU A BANKRUPTCY 3 YEARS AGO AND MY MORTGAGE COMPANY

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I WENT THRU A BANKRUPTCY 3 YEARS AGO AND MY MORTGAGE COMPANY SIGNED OFF ON MY HOUSE. BUT LATER I CAME TO FIND OUT THAT THE SECOND "EQUITY LOAN" LENDER WOULD NOT CLEAR THE TITLE AND THEY WERE INCLUDED IN THE CHAPTER 7. NOW IN ORDER TTO HAVE THEM RELEASE
THEN LIEN THEY HAD OFFERD A SETTLEMENT AMMOUNT. I LIVE IN MICHIGAN. IS THIS A VALID DEBT..I HAVE BEEN ADVISED THAT THEY STILL HAVE AN INTEREST IN THE PROPERTY, AND ALSO BEEN TOLD NOT TO PAY ANYTHING AS THIS WOULD AGKNOWELEGE THE DEBT.. I JUST WANT MY TITLE
CLEAR.. WHAT DO I DO?
Hello and thank you for using Pearl,
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When someone goes through a bankruptcy, it extinguishes their obligation to pay the debts that they have included in their bankruptcy.
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However, it does not extinguish the debts, it just means that you aren't responsible for them any longer. With debts like mortgages, they are secured by the property as collateral for the loan. While the lenders can no longer come after you for the debt, they can foreclose on the property and force a sale of it.
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So both lenders still have a valid lien on the property that they can enforce and foreclose on if they choose to. You won't be able to get a clear title to the property unless you work out some type of settlement with both lenders. Filing bankruptcy doesn't mean that you get your house free and clear. It just means that they can't force you to pay the mortgages.
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If you were to pay something towards a settlement of the second, it would not legally obligate you to pay it off as that debt has already been discharged. Any payments you make would be entirely voluntary on your part.
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Thanks.
Barrister
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If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.
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I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.
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