Violation of Automatic Stay

[DivorceRuinedMe]

My bankruptcy was discharged over 2 years ago. The house that I was living in at the time the bankruptcy was filed was included in the bankruptcy was a ride through. I never signed any papers to reaffirm the loan.

I moved out of the house back in December when I left my husband. He stayed in the house and has not paid the mortgage since I left.

The mortgage company served me tonight with foreclosure papers. Isn't that a violation of the automatic stay?

[sofarsogood2]

No. They are pursuing an In rem lawsuit to reclaim the property- they are not pursuing you, as you have been relieved personally from the debt in the bankruptcy discharge. In order to claim the property, they have to follow normal foreclosure procedures. By law, they must notify you of the pending foreclosure status.

[SMinGA]

Automatic stay ends with discharge - they no longer need to request to lift the automatic stay.

Foreclosure is the legal process for the bank to take ownership of the house. Its not an attempt to collect a debt.

[Billssuck]

SMinGA...what if you are in an active ch13 and are not discharged yet? Doesn't the bank have to request the automatic stay be lifted in that situation before commencing FC process? I'm in that position and I have modified my ch13 to surrender the house and it's been approved by my trustee.

[sofarsogood2]

Yes- the stay must be lifted...and it will be, once they request it, as you are surrendering the home.

[SMinGA]

The original poster is not in an active 13 - she was discharged 2 years ago. Case is done.

If one is in an active 13, then yes the mortgage co would need to file a motion to lift the stay. I don't know if something in the paperwork you have done (to modify your plan, surrender your house) would grant them the right to proceed though? Check with your atty...

SMinGA...what if you are in an active ch13 and are not discharged yet? Doesn't the bank have to request the automatic stay be lifted in that situation before commencing FC process? I'm in that position and I have modified my ch13 to surrender the house and it's been approved by my trustee.

[justbroke]

Just adding on to what SM wrote. In a Chapter 13, the automatic stay ends as to those items not in the Plan of Reorganization once the Plan is confirmed. This is why most plans revert all rights back to the Debtor and not the Trustee. It's a rather simple phrase that does this. However, anything that is provided for inside the plan, is protected by the automatic stay.

In practice though, creditors, when dealing with a Chapter 13, will request relief from the automatic stay just to make sure they are not violating the stay.

[Billssuck]

Thanks SMinGA and Justbroke for the input. I'm at 5 months late on mortgage payments and not a peep out of my bank yet. When we put in for the modification for our ch13 to surrender the house, they were notified then of our intentions and still nothing...not even the lift of the automatic stay yet. Fortunately, we are still in the house and have been saving money and fixing cars and seeing the dentist and other things that went by the wayside after my husband lost his job.

As a side note, we paid our mortgages outside the plan but the mortgages are included in our plan.

Kinda funny, my attorney thought we would be out of our house in 60-90 days...!

[tammygirl1]

Billssuck, how long after you put in the mondification of your plan to surrender your home does your plan amount change to reflect the difference between mortgage and rent? When you put in the change, did you estimate what your rent will be or do you just stop paying and get to save the mort amount until you are kicked out? Just curious to the steps that happen. We just filed but decided to keep our home as rent would not be much different than the mortgage here in N California with a family of 5. We are thinking we may surrender the home towards the end of the plan to be rid of the house before we are discharged and most of the kids will be over 18 and out of house by then.