Q: For a discharged Chap 7. Do you need court approval for a mortgage loan modification?
Filed chap 13 in March 2016, converted to chap 7 in Aug 2016, was discharged but not closed in Nov 2016. Received a permanent loan modification from my bank, they are saying need court approval to execute documents? Is this true and what form(s) are needed to file the documents.
A: Usually, you do not. In chapter 13, you would file a motion to approve mortgage modification. In chapter 7 you do not need court permission to incur new debt. Contact your bankruptcy attorney and inquire why your case remains open. If you do not have an attorney, now is the time to hire one. You can search for an attorney using the Justia "Find a Lawyer" link at the top of this page.
David Earl Phillips agrees with this answer
A: The automatic stay terminated with the entry of your discharge therefore bankruptcy court approval is not necessary. This is clearly stated in Section 362(c)(2) of the Bankruptcy Code. You can try educating the lender to this fact. The problem is convincing the lender of this fact especially if your dealing directly with the bank's loss mitigation department and not their local CT counsel. Also if the lender is requesting reaffirmation of your mortgage loan as part of modification that is not possible due to fact discharge has entered.
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