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QUESTION: we have recently had a chapter 13 discharge. We are in Washington state. We have a first mortgage in the amount of 147000.00 we were 6 months behind on the first and that is why we filed a chapter 13. We also had a 2nd mortgage with citibank. when the garnishments on my husbands check started with the chap 13 we were unable to make the payments on the second due to hardships. we were unable to pay for 18 months.citibank quit contacting us within the first 180 days.  We recently pulled up our credit report and citibank had reported us as a charge off until October 3rd 2012, when our chap 13 was discharged the status on citibank 2nd mortgage stated the debt was discharged through our chapter 13. Does this mean we have no responsibility to citibank anymore. Our first mortgage was 152000 at the time of filing and our second was 890000 we also had a third for 15000. on zillow our house was valued at 323000.  We had it for sale for 14 months with no interest.I have had a hard time getting ahold of my lawyer so i was hoping i could get an answer from you.  thank you

ANSWER: With the numbers you provided as to house value/zillow all three of your mortgages are fully secured.  Whether the second does a bookkeeping entry of charge off or not does not affect your legal obligation to pay them.  

Your question raises something that may have gotten lost in the translation.  After you filed your 13 was there still a wage garnishment going on?  That would be completely improper if it is the case and you could get back every dime of the garnishment after bk filing;  you could also obtain 90 days' worth of garnishments occurring pre-bankruptcy.

Now by "discharge" do you mean your 13 plan was confirmed, you paid all your plan payments, and did your financial counseling & got a discharge after all that?  Or was your 13 dismissed because you couldn't make the payments?

I'm not clear from your question how this came together.    If you got a discharge after completion of the plan, then you have no more personal liability on any of the mortgages, but they can foreclose on the property as the liens survive a discharge.

I am a bit confused by the question so feel free to clarify in a follow up.

Lee

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

QUESTION: yes the chaper 13 was confirmed and has been completed as of october 3 2012.  We filed october 3 2009.  my husbands check was garnishd for 36 months.  We made all of the payments. Is washington state a non-recourse state? As far as a lien, I had been researching this issue, and have seen that after a charge off with citibank, it wouldve have went to a debt collection and could possibly be settled for a reduced amount? I did inform our attorney of the non-payment to citibank. They considered an ammendment but never really followed through. We want closure to this as far as knowing whether or not we still have an obligation to citibank.  Could i possibly find out through our local courthouse, concerning a lien and possibly look up all the records of our bankruptcy?  To say the least, we were not satisfied with the lawyer we used. I hope his answered your questions.

thank you
kathleen

Answer
Was it the chapter 13 trustee that was garnishing your husbands wages with a wage assignment?  Or was some creditor doing that PLUS you were paying the chapter 13?  Very important issue there.

Now as to debts surviving the bankruptcy, liens do survive but your personal liability does not;  meaning if you walked away from your house because you have a chapter 13 discharge (I'm assuming you do) then you have no personal liability to the creditors.  Yes the banks sell these bad debts to people and yes, they then try to collect something from you -- but if you're not legally obligated to pay, then don't!

Let me know on that garnishment & plan payment question.  

Thanks,

Lee

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LEE HORNER, ESQ.

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Consumer bankruptcy questions invited. I've been filing Chapter 7, 11 and 13 cases since 1985 in Calif and Arizona. I do NOT do homework questions. Let me know what state you're located in when you write. My bankruptcy practice is limited to California and Arizona but inquiries from other states are welcome. Your local jurisdiction determines exemptions. Find more background information at our website, www.freshStartAz.info. Individual Chapter 11 and small business chapter 11 questions invited. We can also advise on the creditor's side if for example you have a fraud case, money judgment etc against someone who has filed (or is threatening) bankruptcy. We have filed and defended numerous adversary complaints in bankruptcy court and opposed trustees' demands for turnover of assets from time to time.

Experience

My partners and I have filed over 5000 consumer and small business cases to date in California and Arizona.

Organizations
I've been a member of the California bar since 1984 and Arizona since 2004; also a member of the National Association of Consumer Bankruptcy Attorneys, Bankruptcy section of the Arizona State Bar, Tucson Association of Consumer Bankruptcy Attorneys, Arizona Consumer Bankruptcy Counsel and American Hellenic Educational and Progressive Association (AHEPA).

Publications
I've written a booklet on land trusts for real estate owners, players and dealers, and co-authored a special edition of "Stop Sitting on Your Assets". I was a writer of a monthly law review article relating to California real estate issues and pending and recently enacted legislation.

Education/Credentials
Attorney at law, experienced in trial procedures, adversary complaints filed and defended and numerous claims objection proceedings as well as filing cases for consumer and small business debtors.

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