QUESTION
Will the mortgage lender try to garnish my wages if I walk away from a non reaffirmed mortgage after chapter 7 bankruptcy?
Asked on Oct 07th, 2012 on Bankruptcy - Indiana
More details to this question:
With the lower rates now, we want to leave our home and buy a new one. We are 2 yrs after bankruptcy and we owe as much as a new house will cost us. This mortgage was discharged after and not reaffirmed. Will they come after us in any way?
16 ANSWERS
Daniel James Wilson
No.
Answered on May 21st, 2013 at 3:04 AM
Appellate Practice Attorney serving Cheyenne, WY
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Lynn Boak Attorney at Law
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As long as they were listed as creditors on your bankruptcy filing, they shouldn't be able to come after you now.
Answered on Oct 11th, 2012 at 3:16 PM
Bankruptcy Attorney serving Oakdale, CA
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Law Office of Todd Whiteley
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Can't answer what the Lender may or may not do. But if you listed the mortgage in your bankruptcy schedules and did not reaffirm the debt, then the loan debt was discharged in bankruptcy. By turning the home over to the lender you satisfy the lien. So I don't see a basis for the lender to come after you. But as always - bankruptcy and related laws depend so much on specific circumstances. Before taking a step that large, pay for a full analysis on the issue.
Answered on Oct 10th, 2012 at 12:26 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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I wish I knew where your real property is located so I could give you a more detailed answer. In bankruptcy the discharge eliminated your obligation to pay all the debts listed in the bankruptcy. You can keep secured property so long as you continue to pay for it.
Answered on Oct 10th, 2012 at 12:52 AM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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Shouldn't; anyway, in Texas they can't garnish for ordinary debt such as that.
Answered on Oct 09th, 2012 at 9:08 PM
Probate and Estate Planning Attorney serving Harrison, MI
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David T. McAndrew, Attorney at Law
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That depends on the language of your mortgage. However, Michigan does permit a deficiency judgment on foreclosures. Whether they pursue that depends on the lender. Since your suggest, since you did not reaffirm the debt, but must have been living there as either holdovers, or with the consent of the lender, the mortgage was discharged, and hence, they should not be able to pursue a judgment after you leave. Were you making monthly payments? Or were you just staying as long as you could before eviction?
Answered on Oct 09th, 2012 at 9:02 PM
They will foreclose and sell the home at a minimum. Then, depending on what happened with the mortgage post bankruptcy, they may come after you for the unsecured portion. If they do, you should contact your bankruptcy attorney to determine if they are entitled to do so. They would have to have a persuasive argument that you had assumed the discharged unsecured portion of the mortgage to prevail. In all likelihood, once they foreclose, they will leave you alone.
Answered on Oct 09th, 2012 at 8:53 PM
In order to be able to garnish your wages, you lender must first sue you & obtain a court judgment. If this debt was owed at the time you filed your Chapter 7 Bankruptcy, it was discharged, and if the lender attempts to sue you, it has violated bankruptcy law and you can sue them for damages.
Answered on Oct 09th, 2012 at 8:51 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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As you did not reaffirm and provided that you indicated surrender in your statement of intention, I do not believe that they can legally come after you.
Answered on Oct 09th, 2012 at 12:39 PM
Consumer Bankruptcy Attorney serving Worcester, MA
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Law Offices of James Wingfield
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They cannot garnish your wages post Chapter 7 bankruptcy, assuming you have obtained your discharge. If you obtain a bankruptcy discharge, the mortgage lender?s sole available recourse is against the property (i.e., they can still foreclose on the mortgage), however they are legally unable to take action against you personally. So they cannot sue you to recover the deficiency, and they cannot garnish wages, attach bank accounts, seize your vehicle or use any of the other tools for recovery available to creditors had there not been a discharge of the debt. However, you should tread carefully, if you leave the house vacant, you could still be liable in Tort for injuries and could still be liable for taxes and insurance (as these debts would accrue post-discharge). It will likely be in your best interest to attempt to negotiate a deed in lieu of foreclosure.
Answered on Oct 09th, 2012 at 12:06 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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No the former mortgage company, whose note was discharged in your bankruptcy cannot come after you if the factual rendition provided is correct. I would suggest you see an attorney
Answered on Oct 09th, 2012 at 12:06 PM
Bankruptcy Attorney serving Myrtle Beach, SC
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Law Office of Margaret L. Evans, PC
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Depends - if you surrendered the property in the debtor's statement of intention and didn't reaffirm the debt, then no, they can't assess a deficiency judgment against you. However, even if you didn't reaffirm the debt and continued to make regular payments to the mortgage lender, they could still hold you liable for the deficiency. that's why its important to make your intentions known during the dependency of the bankruptcy.
Answered on Oct 09th, 2012 at 12:04 PM
Making subsequent payments after a discharge usually re-affirms a mortgage. Review the paperwork or contact the attorney who filed your Chapter 7. It is difficult to predict what a lender will or will not do as they all have different policies. At one time, they were so backlogged that people were staying in the home 6 months to 1 year without making payments. Instead of attempting to buy a new home, try to obtain a loan modification. Lending rates have changed. Assuming the lending criteria is still two years out of bankruptcy, you will most likely pay a higher rate.
Answered on Oct 09th, 2012 at 11:43 AM
Chapter 7 Bankruptcy Attorney serving Santa Monica, CA
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Law Offices of Glenn T. Litwak
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No. Your liability on the mortgage was discharged in the chapter 7 bankruptcy. Description: cid:part1.09090707.02070109@yahoo.com Certified Bankruptcy Law Specialist - The State Bar of California Board of Legal Specialization Certified Consumer Bankruptcy Law Specialist.
Answered on Oct 09th, 2012 at 11:42 AM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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After you have received your discharge in a Chapter 7, you no longer have any personal liability for any debt that has not been reaffirmed. The lender still has a Deed of Trust securing their interest in the property and if you default on the mortgage, the lender has the right to foreclose on the property. However, the lender has no right to look you for any deficiency.
Answered on Oct 09th, 2012 at 11:39 AM
A discharged mortgage not reaffirmed cannot come after you personally - rather, they will foreclose the lien against the home itself.
Answered on Oct 09th, 2012 at 11:37 AM