Fairfield, CT asked in Bankruptcy for Connecticut

Q: A question about bankruptcy.

A friend filed for bankruptcy in 2015 because a debtor collector firm filed a lawsuit to foreclose on her home. In which her mortgage had been rescinded in 2005 by her attorney because she had incomplete contract with Ameriquest. So since 2005 by her attorney's advised she stopped making payments and the attorney included her in a class action lawsuit. In 2014 a debtor law firm started a lawsuit to foreclose one her home. Mind you no notices of default ever sent to her until this 2014 lawsuit. So someone advised to file bankruptcy which she did in 2015. She received a discharge from the bankruptcy court. Since then she was suited two more times for the same property, so bankruptcy was discharged and that there was no mortgage. So in 2021 in the third lawsuit the judge granted the foreclosure to the law firm on behalf of Deutsche National Trust Company as Trustee for Ameriquest pass thru... Is it lawful to foreclose on a home that was granted bankruptcy? She has been self representing

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2 Lawyer Answers
Cristina M. Lipan
Cristina M. Lipan
Answered
  • Bankruptcy Lawyer
  • Wantagh, NY

A: Although the bankruptcy discharge extinguishes the personal liability of a debtor, it does not extinguish an action against the debtor in rem, i.e., the secured creditor’s right to enforce its mortgage lien. As long as the mortgage was valid, the secured claim the lender had against the property was never discharged. It sounds like the mortgages might have been invalidated? It's unclear from your question. In any case, the bankruptcy does not get rid of a mortgage.

With respect to notice in the foreclosure proceedings, that is a different question. She would want to speak to a foreclosure attorney to confirm that was done properly.

Christopher H. McCormick and Timothy Denison agree with this answer

Christopher H. McCormick
Christopher H. McCormick
Answered
  • Bankruptcy Lawyer
  • West Hartford, CT
  • Licensed in Connecticut

A: The bankruptcy discharges the personal obligation under the mortgage note, but not the mortgage security agreement.The validity of the mortgage appears not to have been challenged or recognized in the foreclosure action and the court entered the foreclosure judgment. If your friend's only concern is the potential personal liability for a deficiency judgment stemming from the foreclosure the bankrupty discharge protects her from this.

Timothy Denison agrees with this answer

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