After filing Chapter 13 and my mortgage was sold to a third party, can that third party collect the difference of the value from us?

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After filing Chapter 13 and my mortgage was sold to a third party, can that third party collect the difference of the value from us?

Chapter 13 filed in 2008 and surrendered property. Foreclosed several months later and was sold for less then we owed. Original Mortgage lender transfered loan to a third party company, who is now reporting that we have a $43,000 past due amount. When bankruptcy discharges, are we responsible for this $43,000?

Asked on April 30, 2012 under Bankruptcy Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The best way to have your question answered with respect to the Chapter 13 bankruptcy (a reorganization as opposed to a liquidation) is to consult with the presumed bankruptcy attorney that you had concerning the above proceeding who is experienced in real estate law.

If the loan that was foreclosed upon with respect to your home was the original loan (purchase money) then most likely under your state's laws on purchase money loans the lender is precluded from suing you for any deficiency on it. Likewise, in some states, there are laws precluding a deficiency judgment when a lender in a non-purchase money loan forecloses by way of a non-judicial foreclosure as opposed to a judicial foreclosure.

Given the need to know the type of loan that you had on the foreclosed property and how the foreclosure went as stated above, I suggest that you consult with a real estate attorney to determine whether or not the $43,000 claimed against you as a deficiency judgment is a valid claim or not.


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