Bankruptcy Question Please Help
Date: Mon, 10/12/2009 - 17:43
I have a question for a friend of mine because I didnt think this could be done. 7 years ago her and her husband went through a bankruptcy and her debts discharged, one of which was a Home Equity Loan, it was included in the bankruptcy and is listed in the discharge papers. When she did a small refinance last year $10,000 to update her home, she was told they had to include that old home equity loan that was included and discharged in her bankruptcy. So, her loan ended up being over $35,000.
My question is if it was in the bankruptcy discharge how can they later take that and tell her she know has to include it in the new loan? Is this legal, I dont feel it is if it is listed as discharged in the bankruptcy papers. Please help me to help her.
Thank you very much.
My question is if it was in the bankruptcy discharge how can they later take that and tell her she know has to include it in the new loan? Is this legal, I dont feel it is if it is listed as discharged in the bankruptcy papers. Please help me to help her.
Thank you very much.
That's a good question, unfortunately I don't have an answer but
That's a good question, unfortunately I don't have an answer but I wanted to acknowledge your post, keep checking back for replies.
Does anyone know the answer to the question above or could point
Does anyone know the answer to the question above or could point me in the right direction? Any help is greatly appreciated
I have filed a chapter 7 before. My suggestion is to contact t
I have filed a chapter 7 before.
My suggestion is to contact the attorney who processed the original bk action, if there was one.
You might also be able to ask the Trustee who oversaw the claim.
Was the loan through the same bank that the original loan was discharged from?
This really sounds like a question for an attorney who handles chapter 7 - preferably the one who handled it originally.
Quote:My question is if it was in the bankruptcy discharge how c
Quote:
My question is if it was in the bankruptcy discharge how can they later take that and tell her she know has to include it in the new loan? Is this legal, I dont feel it is if it is listed as discharged in the bankruptcy papers. |
A bankruptcy discharge does not avoid any underlying security interests in the collateral given to secure a debt. So any security interests (liens) that were perfected prior to the bankruptcy were not eliminated by the BK discharge, and the creditor still has rights and title to property. In other words, the discharge means they cannot sue or make collection calls to demand payment, but their lien on the house is entirely valid. Or in other, other words, "you don't get a free house or car by filing bankruptcy."
And so their lien is valid and recognized until they are either paid off or act to realize on the collateral (ie foreclosure or repossession). Because their lien is valid, you cannot sell or transfer (or refinance) until the lien is released by the creditor.
There is more that I will not get into now, unless you want me to expand. For example, if there was little or no equity in the house then the BK attorney could have stripped/avoided the lien and then the creditor would be considered unsecured. But that is something that would have needed to be done before the discharge.
