Post BK - do I need to answer a "You are in Default" notice about my Foreclosure??

[KevFinnerty]

I'm a bit confused (as usual). I will of course attempt to get an answer about this from my BK atty's office on Monday but I suspect their answer will be the usual "don't worry about it, the bank is just blowing smoke" kind of thing. If anyone here has any comments or can shed light on this I'm all ears.

Short story is that foreclosure was initiated on my house last year. I filed for BK before a judgement was given. Bank filed for relief from BK stay. Nothing further on foreclosure has happened that I am aware of. My house has equity in it and the trustee at my 341 hearing expressed interest in it and ruled me an asset case. My debts were discharged 5 months ago. Months have gone by and I've yet to hear anything from the trustee about selling my house (I was hoping he would sell it thus entitling me to some of the equity via my homestead exemption but I guess that is not happening).

Today in the mail I received a notice from the bank saying I am in default "because you have failed to enter an appearance and with the court...unless you act within 10 days a judgment may be entered against you..etc".

Am I supposed to respond to this (& how)? Shouldn't the court be notified that my house is part of my BK case?? That the trustee needs to be involved in some way? Or do they already know this?

I'm figuring that the bank is tired of waiting for the trustee to do something and want to move on foreclosing themselves but I'm not sure what is going on. If I don't respond to this and a "judgment is entered against me" does that mean that the bank immediately takes control of my property or doesn't it have to go to a sheriff's sale (which then means a few more months go by before I have to leave)??? (I am in a judicial state - Pennsylvania)...

[LadyInTheRed]

You say the bank filed for relief from stay. Was the relief from stay granted?

[KevFinnerty]

You say the bank filed for relief from stay. Was the relief from stay granted?

As far as I believe, yes. That was last November. My atty said something like it didn't matter, that the bank still had to fight it out with the trustee.

[LadyInTheRed]

If they got a relief from stay, they are free to foreclose. You don't need to respond to the notice. They are required to give you the notice to give you a chance to oppose the foreclosure if you believe you have grounds to do so.

I don't know for sure, but I don't think it's up to you to let the trustee know the foreclosure is proceeding. If the bank gets more for the house than the mortgage balance and their expenses and sends you a check for the difference, check with your attorney before cashing it. You will probably have to pay the non-exempt portion to the trustee.

[KevFinnerty]

Thanks for your response.

[housepoor10]

Hi Kevin,
I can understand why you are concerned. Do call the BK atty and tell them exactly what the letter says. My understanding is if and when they actually file the foreclosure with the county court, you would have received a summons both in person, and via certified letter. Once that is received, you have a certain amount of time to "answer" and file it with the court. The amount of time varys, but is between 20 and 30 days usually. It is in your best interest to file some type of answer though, because then you will continue to receive any and all information via mail about the case. You can also "follow" the case docket notes on the court website. You should be able to see everything that has transpired from the date of filing. The "answer" of course costs nothing. If you do not answer, then what is called summary judgement will be granted to the plaintiff. And if you do not answer, you will not be privy to be included via mail in what has been happening with the case, it will just happen.

I recently received such a summons, both in person and via mail. I filed my answer with the court in the alloted time. I filed pro se, and you don't really need an atty to do this. Just a simple letter in your own words is fine. Just be sure to let them know that the house has been included in the BK, what chapter, and that it was included as an asset and include a copy of your discharge papers, and anything else you feel like letting the foreclosure magistrate know, once you have read the summons you receive, if there is anything you do not agree with, or they do not mention in the filing of the foreclosure you feel important. Banks have a way of not always telling the entire story, so as to get judgement, sometimes when they may not be due the judgement. Just cover yourself, and if they did not "serve" you both in person and by mail, they have not filed the foreclosure yet, but make sure there has not been a mistake. Also, the letter you receive should also contain a case or file number on it for the foreclosure. If they are sending you a debt validation letter, refer to your bk atty on it. Please let us know how you do, and what it is all about, if you have been filed on yet or not. As for mine, I sent the answer, it was recorded on the website, and that was well over a month ago, and not a peep more yet. So slow it makes me ill!!! Good luck!

[shark66]

As you know, PA calls for judicial foreclosure.

Since you've been in BK (and prevented them from getting a judgment by filing) the bank has to start from scratch. Once they actually sue you (and that set of papers will be handed to you personally by law enforcement) you'll have 20 days to respond.

If there's equity in the house, I most certainly would be talking to the trustee, although I'm not a Ch. 7 guru by any stretch of imagination.

Do your math and figure out whether paying a foreclosure defense attorney would be a sound investment.

Good luck.

[KevFinnerty]

Hi Kevin,
I can understand why you are concerned. Do call the BK atty and tell them exactly what the letter says. My understanding is if and when they actually file the foreclosure with the county court, you would have received a summons both in person, and via certified letter. Once that is received, you have a certain amount of time to "answer" and file it with the court. The amount of time varys, but is between 20 and 30 days usually. It is in your best interest to file some type of answer though, because then you will continue to receive any and all information via mail about the case. You can also "follow" the case docket notes on the court website. You should be able to see everything that has transpired from the date of filing. The "answer" of course costs nothing. If you do not answer, then what is called summary judgement will be granted to the plaintiff. And if you do not answer, you will not be privy to be included via mail in what has been happening with the case, it will just happen.

I recently received such a summons, both in person and via mail. I filed my answer with the court in the alloted time. I filed pro se, and you don't really need an atty to do this. Just a simple letter in your own words is fine. Just be sure to let them know that the house has been included in the BK, what chapter, and that it was included as an asset and include a copy of your discharge papers, and anything else you feel like letting the foreclosure magistrate know, once you have read the summons you receive, if there is anything you do not agree with, or they do not mention in the filing of the foreclosure you feel important. Banks have a way of not always telling the entire story, so as to get judgement, sometimes when they may not be due the judgement. Just cover yourself, and if they did not "serve" you both in person and by mail, they have not filed the foreclosure yet, but make sure there has not been a mistake. Also, the letter you receive should also contain a case or file number on it for the foreclosure. If they are sending you a debt validation letter, refer to your bk atty on it. Please let us know how you do, and what it is all about, if you have been filed on yet or not. As for mine, I sent the answer, it was recorded on the website, and that was well over a month ago, and not a peep more yet. So slow it makes me ill!!! Good luck!

Thanks very much for that advice. #1 I will see what my bk atty says. I expect them to say "do nothing, don't worry about it, it doesn't mean anything though". If that is the case I think I will follow your advice and write the letter etc that you suggest. If nothing else but entitling me to be notified of what happens next, then that sounds like a good idea to me.

[KevFinnerty]

As you know, PA calls for judicial foreclosure.

Since you've been in BK (and prevented them from getting a judgment by filing) the bank has to start from scratch. Once they actually sue you (and that set of papers will be handed to you personally by law enforcement) you'll have 20 days to respond.

If there's equity in the house, I most certainly would be talking to the trustee, although I'm not a Ch. 7 guru by any stretch of imagination.

Do your math and figure out whether paying a foreclosure defense attorney would be a sound investment.

Good luck.

Thanks for your response.

I have no money for a foreclosure atty (or anything right now really). I guess I welcome foreclosure at this point, as tough as it is.

[KevFinnerty]

Housepoor, I want to ask some followup Q's. Thanks again for your comments.

I spoke to the atty office, they basically said it is not impt to answer this but I could if I wanted to, but as to where do I send my reply to, they said to reply to the bank's attorneys (not the court???); and I have no idea how to send a reply to the court anyways.

So as usual, I am pretty confused, since your advice made sense to me, but now I'm not sure what to do - I have no idea how to reply to "the court" which it seems like that is what you are saying to do. How do you do that?


Also I have some questions about how foreclosure works, as I read more and more and more about it & various user posts I'm realizing things I thought I understood I may not understand after all. I am going to open a different thread on those questions. I'm kind of confused about what it means as far as the bank getting a "judgment" vs. "the house selling at sheriff sale" and things like cash for keys/being evicted, and the timings involved in all that....even totally putting aside how I am already in BK & the house was an asset in that case.

[shark66]

The bank needs to get a judgment against you to be able to start foreclosure proceedings - this is a somewhat simplified bottom line but that's how it works for the most part.

Once they have a judgment, the sheriff's sale will be scheduled.

You will get notified in person by law enforcement officers of each step that has been taken. The papers will be served on you, personally.

Once the house is sold at the sheriff's sale, you'll have a certain amount of time to leave before the eviction process is started in the court.

Good luck.

[housepoor10]

Kevin,
Hi! I am confused about your letter, because you said it came from the bank and not the court. If they filed FC in court, you would get an actual summons in person, and via certified mail. This only sounds like the bank blowing some sort of bogus scare your way to try to get money out of you. I would check the court website, and also ask your bk atty what they actually think this "letter" is. Since you are in a judicial state, and they already filed for relief of stay, they are free to file the FC with the court whenever they want to, but you would know when you recieve those type of papers. It will list a judge, case #, etc, along with the claims that the bank is making. Then, you would file an answer with the court, pro se. For more information on this, you can google foreclosure summons pro se answer, to see how things are done. You can get a pretty good idea from there. Also, when you get the summons, the first page outlines what you are supposed to do, and how to do it. The way I did mine was I typed up my answer, including copys of the bk discharge papers, info, etc, make 3 copys. Mail 1 copy certified to the attorney at the bank, and keep the return receipt you get back from the certified as proof you send the atty your answer.
The court requires you to do this. And while they require you to do this, it is also required of the bank to properly "serve" you when they file the FC. Then, take in person the other 2 copys to the FC court, address will be listed on your summons, they will date stamp your copy and give it to you to keep, and give the other copy to the magistrate who will in turn review it and give his determination as to what will happen next, or will continue with the judge. You should be able to see a synopsis online at the county court civil records website as to what goes on. If its even been filed yet.

I still do not think its an actual summons, because all that info, judge, case #, claim, time to answer in, etc, will be there, and it does not sound like your letter contained any of that. Hard to tell what they are up to. You could also call them, the bank, and ask them what the hell this is they sent you, and also while you have them on the phone ask them when they plan to file the FC with the court, and if they are even close to doing so. It is however, in your best interest to file the answer pro se when they do file FC, so you can keep up with the step by step of what happens with it. And it sounds like it will be slow going.

Please keep us informed as to what happens, and if you have any further questions. I only hope I am helping you in some way, as I am going thru this on my own on this end, and am not an atty nor do I claim to have any answers, just my experience so far, however it may help you. Have a good day!

[KevFinnerty]

The bank needs to get a judgment against you to be able to start foreclosure proceedings - this is a somewhat simplified bottom line but that's how it works for the most part.

Once they have a judgment, the sheriff's sale will be scheduled.

You will get notified in person by law enforcement officers of each step that has been taken. The papers will be served on you, personally.

Once the house is sold at the sheriff's sale, you'll have a certain amount of time to leave before the eviction process is started in the court.

Good luck.

Thanks very much. That is how I thought it was basically supposed to work but got confused after reading some other things on the web lately. Some of it made it sound like as soon as the bank had their "judgment" they could evict me, or offer cash4keys, as opposed to having the sheriff sale take place BEFORE THAT. My head is kind of spinning I guess.

[KevFinnerty]

Kevin,
Hi! I am confused about your letter, because you said it came from the bank and not the court.
<snip>
...

Thanks housepoor. I'll try to explain better.

First - I cannot say enough though how much you ARE helping me. It is most appreciated. I hope my saga helps others out, or that I can help answer some other folks' questions after I go through all this.

The envelope for this had the return address of it from the bank's attorneys. The letter itself lists the sender as multiple names of all the mortgage companies in the left hand side, and on the right hand side it lists "Court of Common Pleas" with a case number. Then it says vs. Plaintiff (me) underneath. At the end of the letter it lists like 2 dozen attorney names and the return address of the lawfirm representing the bank.

It is actually a word for word repeat of another letter I got last year, right before my bankruptcy got filed. It starts with a paragraph saying something like "THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT....blah blah blah".

Then it says "YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE blah blah blah...UNLESS YOU ACT WITHIN TEN DAYS OF THIS NOTICE A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOST YOUR PROPERTY etc etc"...

Goes on to say to take the paper to a lawyer at once.

It is signed by a lawyer for the bank who is suing me.

So if I am understanding it better now thanks to your note above - this is just the bank's way of saying that they are proceeding with filing for foreclosure (again)? And therefore this isn't worth responding to - instead the thing I should respond to is the actual SUMMONS/NOTIFICATION from the court?? Because this letter makes it sound that unless I answer this (??) they will get a judgment with no further warning (??).

I'm thinking now it is just a legal shot across my bow to indicate that they are going ahead and doing the foreclosure lawsuit filing (again I guess), probably some requirement by law that they have to notify me , and it is the actual courtdate summons (?) that you are talking about that I should answer - NOT this thing!


The only thing that concerns/confuses me now, is that last year when I got this exact same letter, it came about a month AFTER I received something which I think would be called a "summons" for the foreclosure WHICH NEITHER I NOR MY LAWYER ANSWERED (it came from the court and said something about having 20 days to respond to it). The lawyer said we will just declare bk and there was no need to answer the summons (or the subsequent followup letter). I was never notified of any court date, nor of any judgment given. A few months ago I learned how to look up the court filings for my foreclosure and there is no judgment indicated on there.


Is it possible that the bank does not have to go through a formal filing again with the court which will result in a summons that I should reply to, since we did not reply the first time last year (when it was stopped by my BK filing)?

[shark66]

Is it possible that the bank does not have to go through a formal filing again with the court which will result in a summons that I should reply to, since we did not reply the first time last year (when it was stopped by my BK filing)?

That's something you need to check with the court ASAP to find out where your case actually stands.

Good luck.