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I have a mortgage loan with a coborrower. The coborrower is on the note but not on the deed The coborrower filed for bankruptcy. The bank then refused to accept my payments because the loan was in bankruptcy status. As a result they marked my credit report for missed payments, filed an assignment of mortgage during the coborrowers automatic stay and put my mortgage in foreclosure. My question is am I protected by the automatic stay so that I may request the Assignment of mortgage to be null in void?
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No, the bankruptcy automatic stay only protects the person who is filing bankruptcy, not anybody else who may be affected such as a cold borrower. You may get an attorney and file motions in bankruptcy court to attempt to have this situation remedied, this is really not something you to be able to do without attorney unless you are as knowledgeable as an attorney and I feel it would be a great disservice to attempt to explain how this is done. With that being said, you may always file your own chapter 13 bankruptcy and use that to pay back the arrears on the mortgage. The problem here is the bank would not of giving you the money to purchase a home if the cold borrower who is filing bankruptcy now was not on the note, so their justification would be since they no longer have the security of that cold borrower, they no longer want to continue holding the note under your name. Depending on your state's laws, in most states someone cannot be prosecuted simply because they or someone else is filing for bankruptcy, there may be something in your state laws that would protect you. But if you simply hired a bankruptcy attorney can file a motion on this matter, the situation should be able to resolved in bankruptcy court.
I have responded to your inquiry according to the laws of Massachusetts, where my firm is located. Laws can vary significantly from state to state and cases tend to be rather fact-specific, so you are best served by consulting with a knowledgeable attorney in weighing your options.
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Joseph F. Botelho, Esq. BOTELHO LAW GROUP Attorneys At Law http://fallriverbankruptcyattorney.com/ 901 Eastern Ave. Unit 2 Fall River, MA 02723 Office: 888-269-0688 FAX: 877-475-8147
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Answered on Apr 15th, 2014 at 4:59 PM