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obligation of ex-spouse on mortgage after discharge and lien strip
Debtor is divorced and among his property holdings is a property (not
principal residence) that has 3 loans/mortgages secured against it. His
former spouse signed each of the Promissory Notes. The value of the
property is such that in a Chapter 13 (or 11) he could completely remove
the 2nd and 3rd liens, and strip down the first substantially to the
value of the property.
My question is this: If said debtor files a Ch. 13 (or 11) and avoids
the 2 junior liens, and does a 506 cramdown of the 1st mortgage, and
then ultimately receives a discharge, does any of this affect the former
spouse's obligations on those loans? If so, how is it affected? My
initial guess was that:
A. the former spouse would still owe on those loans,
B. the liens that were avoided could then seek recovery (either via
issuing a 1099 or accelerating full amount due) from the former spouse,
since it no longer can pursue the property;
C. the former spouse would still owe on the 1st mortgage, and the 1st
mortgage holder could go after the former spouse for the amount of the
loan that was essentially converted to unsecured debt via the 506 motion
(although I'm not so sure about that one).
Thanks in advance
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/)
________________________________________________
NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
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Debtor is divorced and among his property holdings is a property (not
principal residence) that has 3 loans/mortgages secured against it. His
former spouse signed each of the Promissory Notes. The value of the
property is such that in a Chapter 13 (or 11) he could completely remove
the 2nd and 3rd liens, and strip down the first substantially to the
value of the property.
My question is this: If said debtor files a Ch. 13 (or 11) and avoids
the 2 junior liens, and does a 506 cramdown of the 1st mortgage, and
then ultimately receives a discharge, does any of this affect the former
spouse's obligations on those loans? If so, how is it affected? My
initial guess was that:
A. the former spouse would still owe on those loans,
B. the liens that were avoided could then seek recovery (either via
issuing a 1099 or accelerating full amount due) from the former spouse,
since it no longer can pursue the property;
C. the former spouse would still owe on the 1st mortgage, and the 1st
mortgage holder could go after the former spouse for the amount of the
loan that was essentially converted to unsecured debt via the 506 motion
(although I'm not so sure about that one).
Thanks in advance
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/)
________________________________________________
NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
On 4/29/2010 5:25 PM, David A. Tilem wrote:
>
>
> all correct.
> *David A. Tilem*
> Certified Bankruptcy Specialist**^*+ **
> Law Offices of David A. Tilem (a debt relief agency)
> 206 N. Jackson Street, #201, Glendale, CA 91206
> Tel: 818-507-6000 Fax: 818-507-6800
> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
> Specialization.
> + Business bankruptcy specialist cert. by Amer. Bd. of Certification
> -----Original Message-----
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On
> Behalf Of *schug98
> *Sent:* Thursday, April 29, 2010 4:19 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* [cdcbaa] Post Chapter 7 mortgage default results
>
> Checked prior emails but nothing specific to this question.
>
> Are the following statements correct conclusions:
>
> Debtor files c7, current on mortgage, designates debt as retain and
> pay pursuant to contract (no reaffirmation), but defaults after c7.
>
> 1. Assuming non-purchase money mortgage (refi), lender does not have
> right to sue debtor for any deficiency balance because of the c7
> discharge.
>
> 2. Assume a purchase money mortgage. Lender cannot sue for deficiency
> balance because of state anti deficiency law.
>
> 3. Assume debtor does reaffirm non-purchase money mortgage in c7.
> Lender has right to sue for deficiency balance after post c7 foreclosure.
>
> Thanks,
> Direct Comments: schug98@aol.com
>
> Sharon C. Hughes
> Hughes & Dunstan, LLP
> 21650 Oxnard Street, Suite 1960
> Woodland Hills, CA 91367
> Tel: 818-715-9558 x1
> Fax: 818-715-9559
> www.hughesanddunstan.com
> An A/V Rated Firm by The Martindale-Hubbell Law Directory
>
>
>
>
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