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Help with a Customer being discharged from Chapter 13

By Bobbie Files

Real Estate Agent with Success Real Estate

October 19, 2007 10:20 PM

I was contacted by a homeowner who needs to sell his home. After asking some questions I found out he has been un Chapter 13 protection and it is being discharged on Monday. He appears to have at least a small amount of equity in his home. He said that when the Chapter 13 gets discharged the foreclosure will begin. I am meeting with him today and will read his mortgage statements and mailings received.

My question is......will there be any time to market and sell the home? Do the banks immeditately go to court to be awarded a judgement to foreclose?

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Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Bobbie, Chapter 13 is normally used to protect assets. I would ask him if his case is being "dismissed" or "discharged".

Discharged means that his obligations have been fulfilled. Dismissed means the plan was not completed. ***Note, I am NOT an attorney! This is merely my observation on what you are describing.

I would have him talk with the attorney that he hired for this process. It would be a good idea also if he gave the attorney permission to discuss with you how best to help him.

Good luck!

Oct 19, 2007 10:45 PM

Bobbie Files

Success Real Estate - Taunton, MA

Realtor, Berkley, Greater Taunton Homes for Sale

Kris - THANK YOU -THANK YOU - THANK YOU! I will absolutely do what you suggest. Yes I believe you are correct, he said discharged but if he was making his re-payment plan payments his debt would be paid off and keeping up with his monthly obligations he would be getting a discharge. You are great!!

Oct 19, 2007 10:52 PM

You're welcome Bobbie :-) I hope things go well and you are able to market his home so he doesn't lose what equity he has.

Oct 19, 2007 10:58 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

This doesn't sound right. A mortgage company doesn't have to wait for a bankruptcy discharge to foreclose. If he's in chapter 13, he would have been required to make regular mortgage payment and payments on the arrears through the chapter 13 plan. He can get up to 5 years to make the plan work.

Further, a person can file more than one chapter 13. If he is being dicharged, he can file a chapter 13 for the purpose of selling his home.

This just doesn't add up. The problem with questions about bankruptcy is usually that the questions contain factual errors in the description of the problem.

Oct 19, 2007 11:33 PM

Lenn - I appreciate the comment but my knowledge of bankrupcy, particularly Chapter 13 is that a bank specifically cannot foreclose well under the protection of the bankrupcy, but not keeping current can cause the protection to be rescinded by the court. And if they want to re-file for Chapter 13 again they need to wait 180 days from discharge or dismissal.

Oct 19, 2007 11:47 PM

Uh huh. Until they get one of the below.

III. Conclusion

After considering the relevant the Factors, the Court finds that Wachovia

has satisfied its initial burden and the Debtor has failed to carry the necessary burden to

warrant the continuation of the automatic stay. * * * *

Accordingly, for the reasons set forth herein it is hereby

ORDERED, that the Motion to Vacate the Automatic Stay is granted.

Oct 20, 2007 02:34 AM

Help with a Customer being discharged from Chapter 13

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