2nd and Collections after a BK 7

[albacore44]

Now I am a little confused. The way I read this is that one could wait for the 2nd mortgage to go to a JDB then file a ch 7 and that would take care of the 2nd. But further down in the post it was mentioned that the lien may stay. I am a bit confused by that. Now the original debtor said it was paid in full and they are satisfied, but does that mean the deed is clear?

No. what she did was go through ch-7 on a ride through paying both mortgages. after close of her Ch-7 she stopped paying the 2nd, the 2nd mort then sold account to a JDB and the JDB is making offerings to settle. the JDB s/b holding the lein.

This is the exact thing I would like to do should I decide not to Lein strip through a Ch-13. in my case it might cost me less to settle with a JDB later down the road, rather than suffer in a ch-13, assuming I can get past a UST objection to a Ch-7

[spidge]

Now I am a little confused. The way I read this is that one could wait for the 2nd mortgage to go to a JDB then file a ch 7 and that would take care of the 2nd. But further down in the post it was mentioned that the lien may stay. I am a bit confused by that. Now the original debtor said it was paid in full and they are satisfied, but does that mean the deed is clear?

[albacore44]

There is already a lien on your home from the previous lender (who sold the debt). That lien is transferred to the new creditor (Junk Debt Buyer). The JDB will attempt to enforce that lien. They can do this by foreclosing. If the JDB attempted to foreclose, I would see an attorney and you should probably be able to quash that foreclosure action. The reason is that it's usually difficult for a JDB to show that they indeed own the lien and that they have a right to foreclose. (In some States, like California, it's near impossible for a JDB to foreclose!) They can't just add a new lien to the home because that would certainly be illegal (because they don't have an enforceable debt!). If they did put a lien, you'd go back to your lawyer and file a Motion to Re-Open and Order to Show Cause and for Sanctions. That (filing a lien) would be a violation of the Discharge Injunction and cause for Sanctions!

When you go to sell it, however, they may be able to collect then. Again, whether their "lien" is enforceable when it's sold, is what allows them to collect when it's sold.

Man, I like the way you talk

[justbroke]

Thanks for your input! That is what I am thinking and hoping but then I am wondering if this is too good to be true. And no, I did not reaffirm. Do you know if they can put a lien on our house? I would like to just stay in it (current on the 1st). But when it comes time that we can sell eventually I don't want to be surprised by something waiting in the wings. What do you think?

There is already a lien on your home from the previous lender (who sold the debt). That lien is transferred to the new creditor (Junk Debt Buyer). The JDB will attempt to enforce that lien. They can do this by foreclosing. If the JDB attempted to foreclose, I would see an attorney and you should probably be able to quash that foreclosure action. The reason is that it's usually difficult for a JDB to show that they indeed own the lien and that they have a right to foreclose. (In some States, like California, it's near impossible for a JDB to foreclose!) They can't just add a new lien to the home because that would certainly be illegal (because they don't have an enforceable debt!). If they did put a lien, you'd go back to your lawyer and file a Motion to Re-Open and Order to Show Cause and for Sanctions. That (filing a lien) would be a violation of the Discharge Injunction and cause for Sanctions!

When you go to sell it, however, they may be able to collect then. Again, whether their "lien" is enforceable when it's sold, is what allows them to collect when it's sold.

[frankies_mom]

Thanks for your input! That is what I am thinking and hoping but then I am wondering if this is too good to be true. And no, I did not reaffirm. Do you know if they can put a lien on our house? I would like to just stay in it (current on the 1st). But when it comes time that we can sell eventually I don't want to be surprised by something waiting in the wings. What do you think?

[justbroke]

If you did a "ride-through", which it sounds like, and didn't reaffirm the mortgage, then they cannot collect! You should stop "negotiating" with the Junk Debt Buyer (JDB) and immediately send them (via FAX and certified mail return receipt) a copy of your Discharge and Injunction!

Nothing prevents them from prodding you to get you to pay, but they can't threaten to sue or otherwise prosecute you. If you're there trying to negotiate with them, then they probably are all excited because they may be able to get something from you, on an unenforceable debt!

[frankies_mom]

Hi all,

I have been able to get some info on these boards already with similar situations. But I still have a few questions if anyone has any advice/info they can share.

I went through a Ch 7 two years ago in which I was able to keep my home and everything went smoothly.

I have a 2nd mortgage that was held through Citimortgage. I filed a hardship about 3 months ago due to work/income reasons and they are supposedly offering all of these programs to help people. About 6 weeks ago I get a letter from an insurance company saying they paid the mortgage in full. I was confused so I called Citi.... they say according to them my 2nd mortgage is paid in full, account closed, and off their books. I guess charged off? So then, about 2 weeks after receving this letter from this insurance agency, I get a letter from a DCS collection service saying this is now in collections with them.

I called DCS to see if I can set up something with them. They offered me 4 impossible options to settle my account and then came back and said if I could offer them something they would consider it. It sounded like I was at a used car dealership. I am just wondering if it illegal for them to collect on this since I went through a Ch 7 and did not reaffirm either 1st or 2nd mortgage? According to Citimortgage, they are satisfied and I am current on my 1st through Wells Fargo. We are also upside down and no equity as well.

If anyone has any advice or knows what I should do please help! Thank you!