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2nd Mortgage Collection Call After Bankruptcy Completed

Discuss the legalities of Bankruptcy Law

2nd Mortgage Collection Call After Bankruptcy Completed

Postby Brocly » Mon Nov 28, 2016 10:45 pm

Hi Brian,

A few years ago my husband filed Chapter 13 singly and recently completed the plan and the case was discharged. At the time he filed, we had a 2nd mortgage on our home, but the lien was not perfected.  We contacted the bank on several occasions to have the lien perfected, but they did not do so.  The bankruptcy attorney advised us that the failure to secure the lien changed the character of the loan from secured to unsecured debt, and it was included in the plan with the approval of the judge.  A percentage of the debt was paid as part of the payment plan.  Seven months after the bankruptcy was discharged, I received a phone call from the bank advising me that I owed the full amount of the 2nd mortgage because I had co-signed. I advised that this debt had been included in the bankruptcy as an unsecured loan and would not be paid again. Am I liable for any portion of this debt? We live in Michigan.

Thanks for your help Brian.
Brocly
 
Posts: 47
Joined: Sat Feb 01, 2014 4:34 pm

2nd Mortgage Collection Call After Bankruptcy Completed

Postby Tye » Wed Nov 30, 2016 1:10 pm

Disclaimer:  I am not licensed in Michigan, and the following should not be construed as legal advice.  Lee Legal assumes legal liability for neither the timeliness nor the accuracy of the information provided in this response.  Consult a bankruptcy attorney in your jurisdiction if you have a bankruptcy problem.

--- Unsecured debts included in the Chapter 13 Plan are ordinarily fully discharged upon completion of the Chapter 13 Plan.  Your attorney may have filed a motion to strip the second lien if that lien was wholly unsecured by the property.  You may have to reopen your case and file an adversary proceeding to force the creditor to comply with the discharge order.

On the other hand, if the second mortgage passed through the bankruptcy as a secured lien on the property, then the lien remains valid.  You may have been making payments on a secured lien through the Chapter 13 Plan, reducing the balance in the process, but not eliminating liability upon discharge.

You should have an experienced bankruptcy attorney in your area to review your case and advise you of your options.

Brian V. Lee, Esq.

Bankruptcy Attorney in DChttp://www.lee-legal.com
Tye
 
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Joined: Mon Mar 24, 2014 7:01 am

2nd Mortgage Collection Call After Bankruptcy Completed

Postby zebulon71 » Sun Dec 04, 2016 5:54 am

Hi Brian,

A few years ago my husband filed Chapter 13 singly and recently completed the plan and the case was discharged. At the time he filed, we had a 2nd mortgage on our home, but the lien was not perfected.  We contacted the bank on several occasions to have the lien perfected, but they did not do so.  The bankruptcy attorney advised us that the failure to secure the lien changed the character of the loan from secured to unsecured debt, and it was included in the plan with the approval of the judge.  A percentage of the debt was paid as part of the payment plan.  Seven months after the bankruptcy was discharged, I received a phone call from the bank advising me that I owed the full amount of the 2nd mortgage because I had co-signed. I advised that this debt had been included in the bankruptcy as an unsecured loan and would not be paid again. Am I liable for any portion of this debt? We live in Michigan.

Thanks for your help Brian.
zebulon71
 
Posts: 74
Joined: Wed Feb 13, 2013 11:16 am


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