Quote:
Originally Posted by arizonalover
I filed for Chapter 7 BK in 2005 in Illinois and it was discharged 90 days later.
I paid for the mortgage for a year or so and then due to wanting to relocate I notified the mortgage company 4 times of my intentions to not keep up the mortgage payments and offered to do this easily and sign whatever they wanted me to so they would save going to court and I would save the additional foreclosure. I since have moved out of state and walked away from the property. I included my home in that filing and I stayed in the home for a year and a half and made the payments - all the time being told I wasn't responsible since the home had been discharged in my chapter 7 - now the original mortgage holder, AFTER I notified them of my intent to abandon the property - sold my mortgage - they refused to work with me on doing a deed in lieu of foreclosure. So now I am dealing with an attorney back there in Illinois that states that once the home is sold I will be responsible for anything not paid off by the auction!!!! They keep saying "well, the chapter 7 is discharged" and I keep telling them yes, I know that and that means it was a write off, or whatever you want to call it, but I got out from under it when the BK went through the courts all the way - so what is the deal here ? They tried to tell me that when the mortgage was sold that the new mortgage company wasn't included in the BK and didn't have to honor that. I told them that the property was included and that the BK followed with the property, but they keep telling me I am wrong! Isn't the mere fact that the BK was discharged mean that the courts accepted it and all my debts? This is ridiculous that one mortgage company KNOWING that I was abandoning the property - sold it and then it got sold AGAIN - this time to a mortgage place close to my new home in Arizona. All the time I had this home in BK after the fact I always got asked by the mortgage company when I had to call and ask a question about the escrow or whatever "do you wish to keep the property at this time?" and I usually answered yes until earlier this year when I said nope and they hemmed and hawed and didn't send me any papers to do the deed. I don't care what happens to the property but I didn't think I was responsible for anything once a debt was included in BK ? If that was the case then all my credit cards and my car loan, etc, would be coming after me now too if that rationale was the same as the attorney for the mortgage company is trying to tell me, which I don't believe. I called the original mortgage company when I decided to walk away and it took them 4 months of telling me they would send me the stuff to fill out to do a deed in lieu of foreclosure before they finally told me I needed to list the property, which I could have done easily in the 4 months before I moved. I didnt think a further hit to my credit for a foreclosure could be reported on a BK included item but the attorneys are telling me that it can be AND that if they sell the home in auction for less than the mortgage they will come after me for the balance. This sounds like a con to get me to pay up but I don't care what they do with it anymore. They went to court and started foreclosure and it is being put up for auction later this month.
Any words of affirmation that I am right in my thinking that they cant come after me anymore would be helpful.
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Your timeline is a bit confusing, so please bear with my response. Did you continue to make mortgage payments
after the bankruptcy was discharged? If so, there's a very good possibility your original mortgage company
wasn't listed on the final schedule of creditors at the time of discharge. I'd suggest you compare your preliminary secured creditors schedule (at the time you filed) against this final schedule that was included with the discharge .. if that lender name appears on both, I think you could argue (weakly) that the property was in fact included. But if you continued to both occupy the property and make payments for that "year or so"
after the discharge, in my opinion you reaffirmed that debt and then for whatever reason, defaulted on it.
It's not very likely your original lender transferred or sold a "bad loan" without proper notification. It's very possible that because you chose to make voluntary payments during and after the discharge, the lender reaffirmed the debt on your behalf (in effect, removed it from the bankruptcy.) You can't avoid foreclosure by simply writing letters .. you entered into a legally binding contract; you made a promise to repay at the time you closed on the house and agreed in the mortgage note disclosures you signed to also repay any future lienholders when/if the loan is transferred. Your original contract (mortgage,note, etc.) supercedes any correspondence (verbal or written) unless the other party chooses to renegotiate a new one. Period. Unless your final bankruptcy schedule clearly lists your original lender by name, in my opinion, you're still bound by that contract. As such, either the original lender or its subsequent assignees can legally pursue you, in this case, through foreclosure and sherriff's sale. They also have the legal right to notify the credit bureaus accordingly .. you
will have a foreclosure entered after a discharged bankruptcy. (Current banking and credit laws allow this.)
That being said, there IS a chance of a massive banking 'foo-foo' here. I believe it all lies within your bankruptcy documents. If you can provide a copy of final discharge showing that original lender's name to the new lender, in my opinion, you're no longer liable. If your loan's been sold more than once (and it was included) I also agree you're not responsible and the lenders need to look into their own servicing/sale contracts for recourse. Unfortunately, it means you as the consumer must keep careful track of your credit report and if needs be, continously send the credit bureaus a copy of that same discharge and final creditors to have the correct information updated. I'd also suggest you keep copies handy for the future creditors; it'll help expedite your credit approval process. Just a thought.
Do yourself a tremendous favor and request a copy of ALL of your bankruptcy docs from the county where you originally filed. Cook County and other counties still maintain bankruptcy records through their courthouses, sometimes available eletronically for a fee. Make sure you also request a
final discharge and
final schedule of creditors as well. (There should be 2 separate schedules; prelim and final and hopefully they match.) Best bet in a complicated case such as this is to have either your original bankruptcy attorney (if still available) or have another attorney in your area (licensed in Illinois law) review them. A final suggestion here: if in fact, this is NOT your debt, you have certain rights. (see
The Fair Debt Collection Practices Act, in particular § 805-6.) You may want to review this as well, and also discuss this with the attorney.
Good luck.