You are here:

Bankruptcy Law/BK Discharge/Unrecorded Mortgage

Advertisement

Expert: - 9/28/2009


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.

http://www.bklaw.com/

---------- FOLLOW-UP ----------

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.

Bankruptcy Law

All Answers

Answers by Expert:

Ask Experts

Volunteer

Mark J. Markus- California Bankruptcy Attorney

Expertise

Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

Experience

Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

    • ©2012 About.com, a part of The New York Times Company. All rights reserved.