Re: Legal question Bankruptcy - Posted by Jim FL
Posted by Jim FL on October 16, 2003 at 16:10:11:
Definitely a question each individual needs to ask their BK attny.
I know there are different chapters, and different procedures etc.
Personally, from many years ago, I filed one, before finding REI, and we included mostly high credit cards, and left our home loan in place.
I cannot remember what they called it, something like, “Reclaiming” or some such term.
Basically, we let the smaller debts go that got us in trouble, kept our house and car loans in tact, making payments on them.
It was sad, because immediately upon discharge, ALL kinds of offers of new credit came around daily.
No wonder folks get into trouble so easy these days.
Thank goodness I found this business before I re-applied for some more plastic.
Anyway, loans can be left out of a BK, at least under what I seem to recall is called, “Chapter 7 BK”.
Also, on the original point, I have a few houses where my sellers later filed BK, included the home loans we took over, without notifying us.
The lenders continue to take the payments, and the only recourse to the lender, is to foreclose and take the collateral, not against the original barrowers credit, since the debt was discharged in BK.
Never had any noise from lenders, and I love these.
They are homes I won’t mind holding for a while now.
I sent in one payment on a particular house like this one month, on like the 7th, when I usually mail them on the 3-4th.
I got a letter from the lender, reminding us to send our payment, and if it had already been sent, to disregard.
At the bottom of the letter, was the little “Fair debt Act” language, with something added.
It stated that since this debt was included in a personal BK, any efforts to collect the debt were not against the barrower personally, but against the collateral that secured the debt.
I ran that by my attny, and he said, “yup, just what it says.”
Honestly, I no longer panic if a seller wants to file a BK later on and include the house.
As long as the lender still takes the payments, cool.
Just my two cents,