If my Chapter 7 was discharged 6 years ago and we stayed in the house but did not reaffirm the mortgage, what happens if it now goes into foreclosure?

The mortgage was recently sold and we are being threatened with foreclosure, we are several months behind. This mortgage does not show on my credit report since it was “closed” or “satisfied” through the Chapter 7. I am looking for a new home, and currently have a good credit score and got pre-approved for a loan.If they go forward with the foreclosure, can they come after a new property I purchased?

Asked on March 5, 2015 under Bankruptcy Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

For a more definitive answer, you need a bankruptcy lawyer to review the filings and court resolution with you, but as a general matter: if a mortgage is not reaffirmed, the debt can be discharged as against the debtor, but the security interest is not eliminated. That means that if the mortgage is not paid, the lender--or someone who buys or otherwise takes over the mortgage from the lender--can foreclose on the property; however, they cannot sue you for any remaining balance (e.g. for anything left over after the property is seized and sold) and cannot go after other real estate you acquire.


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