Expert: Terry Leeders - 12/26/2007

Question
My husband and i filed for a ch 7 bk in 6/05 we were discharged in 11/05. In 2007 we went to refinance our house and found it had been discharged in the bk. we called the mortgage co and they said it was never reaffirmed.We called the title co and they said we were the only ones on the title. So their are no liens on our house. My question is if it is discharged and their were no liens put on the property then do we own it free and clear? Also our mortgage co continues to send us statments for payments, which i did not think they were suppose to.

Answer
Your mortgage company still has a lien on the home.  Since it is 'discharged' they cannot collect on the payments, however their lien will stay on the home.  They can then pursue a foreclosure to take the property back, and recoup their loan.  To prevent this, you should work out payment terms with the lender, stay current on your original loan terms, or else refinance to work with a different lender.  Bankruptcy does not distinguish their mortgage lien, but just prevents them from collecting on the debt directly.