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Question QUESTION: Went through BK 13 in NJ, I claimed bank as secured, they ended up being unrecorded, they obtained stay relief using fake recording info, I went on to get a discharge minus paying them in and out of the BK, they tried to record in state court after discharge, judge disallowed because they couldnt explaing what happened. Now they are trying to foreclose, is this a violation of the discharge? thanks
ANSWER: Well, trying to foreclose isn't a violation of the discharge IF they have a valid perfected lien against the property that entitles them to foreclose. If they do judicial foreclosures in NJ, then that might be seen as a violation of the discharge, since I believe that there is a monetary component to judicial foreclosures, as opposed to non-judicial which merely seeks to recover the property.
Unless you specifically had the lien issue litigated in the Chapter 13 case (via, for example, a motion to avoid the lien), then you probably still have to contest the action they are taking now in the appropriate state court. I would suggest getting a real estate attorney for that and then seek costs and damages against them if they had no legal basis for foreclosing.
QUESTION: Thanks I appreciate the answer. No they never perfected the lien either before or after the bankruptcy discharge, they tried to in state court, also wouldnt that make them an unsecured creditior as well, and sind I recieved the discharge doesnt that mean anyhting.
We are a judicial state, and will seek damages as well.
Answer All the discharge does in any bankruptcy case is eliminate your obligation to pay on the debt. So assuming you received a discharge, you do not owe anything further to this creditor. However, It does nothing to remove the lien, if any exists. Your contract and state law determines the grounds on which a creditor can seek to foreclose on its lien. That is unaffected by the discharge.
