Bankruptcy filing stalling the foreclosure process on my properties

Question: We filed for bankruptcy in first quarter of 2011 and it was discharged four months later. Two of our residential properties financed by different banks were named in the bankruptcy: 1) this property was financed through a mortgage from the first bank, 2) this property was financed through a mortgage and an equity line of credit from the second bank. Both lenders have not foreclosed on the properties yet. We tried to do a loan modification with the second bank, but ran into a roadblock. Since then we have decided to move on with our lives and let the banks foreclose on the properties. However, the banks keep on stalling the foreclosure process. Is there a “statute of limitations” that prevents the banks from foreclosing on our properties, because both properties were listed in the bankruptcy? At this point we would like the foreclosure process to move forward.  However since both properties were named in the bankruptcy, we are worried that banks will come back to us at some point and let us know that both properties are still our responsibility.

Response: Foreclosure can be a very lengthy process that could take a number of years, not just months, especially if you live in states that have experienced a lot of foreclosures in the last few years. In those states, courts are doing everything possible to slow down the foreclosure process to help save as many homes as possible. The date since you filed for bankruptcy is irrelevant here. The bank will foreclose on your home as soon as they can (legally and procedurally).  It will definitely be a quicker process if you do not oppose it. At the same time, you can perhaps try to do a deed-in-lieu of foreclosure, whereby you give up the deed to the house to the bank and that too could significantly expedite the process.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information. Copyright © 2013 Law Office of Svetlana Kaplun, P.C.

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