A mortgage or trust deed has two components:
(2) A security provision (lien) that enables the lender to foreclose if you fail to meet your payment obligations under the loan. [See Secured Debt Defined].
The bankruptcy discharge:
(1) Eliminates and wipes out your personal liability for the mortgage; but
(2) Does not eliminate the security interest (lien).
Therefore, after a bankruptcy discharge, the mortgage lender still has its rights in the property, including the right to foreclose if you breach the loan agreement by failing to meet your payment obligations.
Note: Certain types of liens (for example, judgment liens) can, in certain cases, be eliminated through bankruptcy. Further, in certain limited circumstances, a HELOC or second trust deed can be eliminated at the end of the successfully completed Chapter 13 payment plan.
For a free and confidential consultation, contact southern California bankruptcy lawyer Matthew B. Tozer.
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