If I lose a piece of land in a civil suit does the loan on the property stay with me or go with the land?

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If I lose a piece of land in a civil suit does the loan on the property stay with me or go with the land?

My father loaned me money to buy a lot of land with a mobile home on it. I rented it out for years. Eventually I fell on hard times and could no longer afford to pay on the note. My father never assessed penalties or forclosed on the property. He died 3 years ago the note went into a family trust. I lost ownership of the land in a civil suit but the family retained ownership of the mobile home on the land. When the new landowner took possession of the land does my delinquent mortgage now belong to the new owner of the land or do I still owe this money to my family trust?

Asked on June 17, 2012 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Ordinarily, when one loses a piece of property subject to a secured loan on it to a judgment creditor, the judgment creditor takes the property subject to the secured loan relieving the judgment debtor (original owner) of the obligation on the promissory note that presumably is secured by a mortgage on the property.

The lender on the loan secured by the property can then foreclose on it even though there is a new owner. The new owner in order to keep the property must cure the loan's delinquency.

From what you have written, you most likely do not owe this money to the family trust. To be sure, I suggest that you consult with a real estate attorney.


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