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Hi everyone..we purchased a home in 2005 from an individual...we signed paperwork stating that we still owed the seller $7,000...we filed ch 13 bankruptcy in 2007 and included seller in it...told the attorney that we guessed it was considered a second mortage..well the seller did not file the deed with the courthouse and didn't receive any money because the trustee said it was a personal loan...now the seller wants their money and finally last Wednesday actually took the deed to the courthouse and said it is a second mortage!!! Now the seller claims he can foreclose on the second mortage ($7,000)....even tho' the first mortage is $65,000!! Lawyer claims seller has to pay off first mortage to get the second mortage we owe..is this true??? We are completely baffled...why did the seller wait 8 years to do this?? Is there a statue of limitations on filing second mortage paperwork?? If he had done this when he was supposed to, he would have been the first mortage holder correct?? Any ideas on what to do??
We have contacted attorney, so we are waiting on what he says..we will pay the seller..not all at once..he will have to take payments....just can't figure out why he didn't try to collect during the BK...we will just have to wait and see
If you never planned on paying this guy back, why didn't you list it in your bankruptcy?
It was listed in the BK......we were paying him up until we filed BK...they ( sellers) never turned paperwork in to trustee...that's why they didn't get paid thru the trustee....there wasn't any record of it being a second mortgage until this last week..
have to? can you think of ANY other options available to him?
Quote:
just can't figure out why he didn't try to collect during the BK...
taking a stab...
he thought the lien was recorded way back and (like a balloon) he would get his
when the property changed hands. As to collecting *during* the BK... whats the point?
They weren't paying anyone.
Check with your BK attorney, but it might be considered BK fraud if this guy is trying to collect on a debt that was discharged during BK. You just can't go around filing liens against someone's property without proper legal standing.
Hi everyone..we purchased a home in 2005 from an individual...we signed paperwork stating that we still owed the seller $7,000...we filed ch 13 bankruptcy in 2007 and included seller in it...told the attorney that we guessed it was considered a second mortgage..well the seller did not file the deed with the courthouse and didn't receive any money because the trustee said it was a personal loan...now the seller wants their money and finally last Wednesday actually took the deed to the courthouse and said it is a second mortgage!!! Now the seller claims he can foreclose on the second mortgage ($7,000)....even tho' the first mortgage is $65,000!! Lawyer claims seller has to pay off first mortgage to get the second mortgage we owe..is this true??? We are completely baffled...why did the seller wait 8 years to do this?? Is there a statue of limitations on filing second mortgage paperwork?? If he had done this when he was supposed to, he would have been the first mortgage holder correct?? Any ideas on what to do??
I work with this situation all the time.....
If you are not late on your 1st mortgage - the 2nd can't do anything because they are in second lien holders position. The 1st mortgage is not going to allow a subordination of the 2nd mortgage, because the amount your owe on the 1st is larger.
This happens often with 2nd mortgages when they realize they are not going to get paid. They will release themselves from the tile so they can go after a judgement in civil court. Once there is a judgment, (worst case) the sheriff can come to your home and confiscate items to auction to satisfy the debt.
If you are late on the first different story - then the 2nd lien holder could file the foreclosure documents for both the 1st and 2nd mortgages.
Knowing personal lien was not filed at the court house after the closing in 2005. Because the seller attached the lien to your title (years later), now they are locked in behind the 1st mortgage.
This is guarantying them they will get the money owed when you sell the property. I find it unrealistic of the releasing themselves from the title to come after you in civil court because of the stated of limitations. It was their responsibility to file the lien at your court house in a timely fashion, which they didn't. The statue of limitations for personal debt is different between the states. (See the link below). There is a good chance this debt is expired.
Honestly you do owe that money to the seller, $7,000 is $7,000. I recommend contacting the seller to see if they would negotiate a lower settlement. The is the right thing to do....
Heard from attorney on this matter...seller was sent a letter stating that they were contacted 4 times during our Chapter 13and since the seller did not provide the proper paperwork ( didn't file the deed with courthouse and with trustee) then the seller has no legal rights to the money..the debt was discharged. Seller was instructed to cease all contact and to release the lien back to us. We are up to date on first mortage ( actually pay 3 days ahead of schedule and pay about 15 to 20 dollars extra a month).. We are breathing just a small sigh of relief....he has been driving by here very slow and we look for him to pull in at anytime and start an argument ( I will not argue with him..I will politely ask him to leave and tell him this is private property) ...Please understand that we wanted him to get paid when we filed BK ( and he would have received all of it) ...that is why we included him in it....why he didn't file the necessary paperwork is still a mystery to us...
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