Saturday, May 25, 2013

Saving Your Home after Filing for Bankruptcy

Question: I deeded my home to my son to start his business a few years back.  Soon after, the business failed. He filed for bankruptcy. The final judgment from bankruptcy court dissolved him of the bills concerning the business including the mortgage on the home. Soon after the end of the bankruptcy, the bank that was holding the mortgage sold the property to another mortgage company. We are in final foreclosure procedure now. I tried to negotiate with them for fair market value with no luck and so far we continue to accumulate interest. What are my options?

Response: When one files for bankruptcy, the obligation under the note is discharged but the bank's right to pursue foreclosure under the mortgage agreement remains. The bank has a right to foreclosure on the property. To stop it, you may need to become current on the mortgage. Most banks do not like to negotiate a short payoff with the borrower so the person who originally obtained a certain amount doesn't benefit from the transaction by now having to pay less. So, it is hard to accomplish. When you go to court, you should realistically weigh your options and see if you want to save this property.  After filing for bankruptcy, the bank cannot sue the owner for deficiency since the obligation under the note no longer exists.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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