Secured debts normally survive
bankruptcy.
A mortgage or
trust deed has two components:
(1) A promise by
you
to pay the loan; and
(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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2010
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