Can a creditor reposses collateral or foreclose on property after a bankruptcy discharge?

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Can a creditor reposses collateral or foreclose on property after a bankruptcy discharge?

I filed Chapter 7 pro se on and have been discharged. My mortgage balance is $404K; my market value is $160K. I received a letter from a debtor for my in-ground swimming pool which was included in the bankruptcy saying that my security interest in my property was not discharged. I thought it was a credit loan but I found the paper work and it has a deed of trust and request for notice of default for the loan. What should I do – contact the creditor or ignore the letter.

Asked on January 7, 2013 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You should retain an attorney to help you. The fact is, a bankruptcy may discharge the debt but does not eliminate a security interest in property; if there is a security interest, then the creditor may foreclose or repossess unless the debtor continues paying or comes to some arrangement with the creditor. The bankruptcy limits the creditors options to foreclosure/repossession--the creditor cannot also or instead sue the debtor for the money--but it still allows that remedy.


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