Laurel, MD asked in Bankruptcy and Real Estate Law for Maryland

Q: Good day, This question is for a real estate attorney experienced in chapter 7 post bankruptcy.

I was told by the mortgage company that the mortgage statement was not correct that If I refinance or sell the property that I still live in, That I would only be responsible for the principal balance of $66k.

However, the statement says there is a deferred balance of 189k.

Over the phone , they say that will not be able to collect that post bankruptcy. However, when I try to refinance, companies say that I don't qualify due to the deferred balance...what can I. Do ?

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1 Lawyer Answer
Daniel Staeven
Daniel Staeven
  • Bankruptcy Lawyer
  • Annapolis, MD
  • Licensed in Maryland

A: It is clear that the mortgage company representative is melding two issues together to come up with a nonsensical result. The issue here is that while the Chapter 7 discharge absolves you of personal responsibility on the loan the liens remain. So, the deferred balance is part of the lien that remains on the property. Therefore, no lender will refinance you without paying off that deferred balance and the current balance. Any new lender will want to take a first position security interest on your property and must deal with the deferred balance.

Good luck with your future endeavors related to this property.

Anthony M. Avery and Mark Oakley agree with this answer

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