QUESTION
How do we take care of your deficiency balance after we file for bankruptcy?
Asked on Jul 22nd, 2011 on Bankruptcy - Indiana
More details to this question:
My husband and I are filing for Chapter 13. We own two houses and can not keep up with payments and our mounting credit card debt. We are going to stay in one house and "let the other house go" as part of the Chapter 13. If we repay the trustee the balance of all our debt in 3 years and the BK is discharged, can the mortgage company come after us for the deficiency balance on the house that we let go?
9 ANSWERS
Debtor's Rights Attorney serving Atlanta, GA
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Theodore N. Stapleton, P.C.
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You may be able to convert your chapter 13 to a chapter 7 and discharge the debts.
Answered on Jul 25th, 2011 at 12:30 PM
Family Law Attorney serving Bellevue, WA
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Dearbonn Law Offices PLLC
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Include the deficiency balance in the chapter 13 and pay it to the Mortgage company in installments.
Answered on Jul 24th, 2011 at 3:15 PM
Bankruptcy Attorney serving Cleveland, OH
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Benson Law Firm
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No, as long as you haven't signed a reaffirmation agreement.
Answered on Jul 24th, 2011 at 3:01 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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If you give up a house in bankruptcy there will be no deficiency owed. It will be discharged.
Answered on Jul 24th, 2011 at 2:36 PM
I don't know where you got the information you have but this all is not in line with what you do with a Chapter 13. When you file for bankruptcy it should create a FRESH START no matter what. As long as you do it the right.
Answered on Jul 24th, 2011 at 1:53 PM
Trusts and Estates Attorney serving Jacksonville, FL
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Law Office of David M. Goldman PLLC
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If the documents are filed correctly and you complete your plan, it can be structured so that you will not be responsible for the debt. (Assuming there was no fraud committed when you applied for the loans) We are seeing an increasing number of banks going after individuals in bankruptcy who falsified income or misrepresented their financial condition on their loan applications.
Answered on Jul 24th, 2011 at 1:43 PM
Glen Edward Ashman
First of all, most Chapter 13s must be 5 years. A 3 year plan is probably going to get rejected. (There are exceptions but they are unusual). A deficiency in a mortgage is an unsecured claim (if made) and your plan needs to consider that. I am currently handling a similar issue for a client and these cases are difficult. You need a lawyer, and let the lawyer decide what will work.
Answered on Jul 23rd, 2011 at 8:21 AM
Bankruptcy Attorney serving Herndon, VA
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Maureen O'Malley
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No. That's why it's called bankruptcy "protection."
Answered on Jul 23rd, 2011 at 7:03 AM
If you receive a discharge in your Chapter 13, your personal liability on the mortgage note and successive deficiency, if any, will be extinguished.
Answered on Jul 23rd, 2011 at 6:08 AM