2nd Mortagage co foreclosing on home for 25,000.00 loan...1st mortage perfect...interesting situation?

Question

4 years ago, my husband and I filed for chapter 13 bankruptcy. I thought that our 2nd mortage was included in the bankruptcy, and had no reason not to, until a month ago, when we get a call out of the blue from the bank's collection agency demanding the full payment of the loan, plus interest which on the original loan on 27,500.00 is now at 33,000.00. Now, for over 4 years I have not received the first late notice or phone call from the bank to tell me I was late on a payment. I made a horrific mistake and want to take care of it, but do not have that kind of money. We have been discharged from the Bankruptcy for over 1 year as well, and this is our 1st notification of any problems. Out credit report even says the account is paid as agreed. I had no reason not to think this account was not included. Now Im going to loose my house. The recovery agency says they'll sell the house, pay off the 1st mortgage and get whatever they can for the 2nd and send us a bill for the the remainder

Answer 1

Like the other person said, get a hold of your old attorney and explain the situation. Your second should have been included. I fyour attorney made a mistake, he is liable for any damages you suffer as a result from this. It seems like your second got transfered to the loss mitigation department and what they stated, is normal protocol for a second to do.

Regards

Answer 2

You should consult with your old bankruptcy attorney. They will have the best information on how to proceed. I can't believe that an attorney would NOT put your 2nd mortgage in it.
The situation the bank is describing at the end "The recovery agency says they'll sell the house, pay off the 1st mortgage and get whatever they can for the 2nd and send us a bill for the the remainder" sounds like the standard foreclosure process.
Were you discharged or dismissed from your bankruptcy?

Answer 3

As you put yourself in bankruptcy you really done yourselves in. During 7 years from bankruptcy any money you make can be claimed against the original debt. From what I read the bank is correct...they will sell whatever they can to recover the total amount of debt. They will argue that it is your responsibility to make sure the payments are made on time. It is not up to them to nag you to pay. Even if this was all direct debit you should have checked all the bank statements to ensure this was done. Take your credit report to a lawyer and they will probably be able to come to some resolution for you.

Answer 4

If your attorney failed to do his job in the bankruptcy, I would think you would have a case against him for not including all of your debits in the original case.