Notice of Default after chapter seven discharge

10 Replies

I'm wondering if anyone can help me with this question. 

Filed chapter seven last year, included the house (surrendered) and was discharged Nov. 2017. Am presently living here saving money for next home, and because I'm closely following my credit score, saw a 60 point drop the other day. After researching online the steps bank takes to foreclose, I'm wondering if they've filed a notice of default. Can they do that after my mortgage was discharged? I'm told there is "something in the mail" I have to sign for and have not received it yet.

Is that a violation of my discharge, to file a notice of default on a loan that no longer is valid? 

All I care about is my credit score, and know this place could go to auction soon. 

Thanks if anyone knows

Originally posted by Account Closed:

I'm wondering if anyone can help me with this question. 

Filed chapter seven last year, included the house (surrendered) and was discharged Nov. 2017.  Am presently living here saving money for next home, and because I'm closely following my credit score, saw a 60 point drop the other day. After researching online the steps bank takes to foreclose, I'm wondering if they've filed a notice of default. Can they do that after my mortgage was discharged? I'm told there is "something in the mail" I have to sign for and have not received it yet. 

Is that a violation of my discharge, to file a notice of default on a loan that no longer is valid? 

All I care about is my credit score, and know this place could go to auction soon. 

Thanks if anyone knows

Sorry to hear about your financial woes, but good to hear you're getting back on your feet. Unfortunately even though you filed BK7 and surrendered the property, technically you're still on title of the property even though you're not living in it. So the lender will still need to file for foreclosure in order to take it back, and hopefully repay some of their mortgage balance.

You can however avoid this by contacting the lender (or most likely their servicer) and offer to sign a deed in lieu. This will alleviate the stress that a foreclosure will put on your credit score. The good thing also is since you filed BK7 and was discharged, is that they can not file a judgement against you if they do not fully recoup the debt outstanding.

Yep, this is how it works. You no longer are responsible for the actual debt on the mtg, but the bank does get to foreclose since the house is the collateral for the loan.....you don’t get to just keep the house too.

Neither one of you understood or answered my question. I am aware of the foreclosure. What I am asking here is can the servicer file a notice of default on a discharged loan? Wouldn't that be a violation of the chapter seven discharge?  

I don't know the answer specifically but I believe that Chad offered a solution that might help you whether the bank can or can't.  If this credit drop is urgent to recover, I'd be proactive and call the lender/servicer and see what you can do to make this go away.  In the end that fixes your situation whether the bank is in the wrong or not. 

Tom, huh?  Do you guys even read the posts? I clearly said I am living here saving money, and Chad responds with since I'm not living here.  I have no financial "woes" I am debt free, living here saving money to buy something else cash. 

If no one knows what a notice of default is after a chapter seven discharge, then why write a bunch of nonsense?

oh, chad is also incorrect on the foreclosure/credit. .A foreclosure cannot be reported after the mortgage has been discharged. Just fyi...

Hi Wayne, that makes sense, but in a way it doesn't. I still would like to find out how there can be a notice of default on a discharged debt. I understand the need for foreclosure, for my name to be removed from title. Since my credit took a hit with my chapter seven discharge, it just seems like double dipping on my credit, and that's what I'm trying to figure out. I read somewhere that it's a violation of the chapter seven injunction, but I"m new to all this and simply trying to figure it out. 

I'm glad to be soon unburdened by this way underwater house which needs a ton of work. 

thanks

 I can clearly see I joined this forum by mistake. Never mind This place is for people to make money off other people's life events which caused them to lose their homes.  Should have noticed the name of it. 

Will go elsewhere

"account closed", if you still read this.....yes, there is an inherant "double hit" to credit and financing later. The number of missed payment is the biggest hit to your credit, but an actual foreclosure or short sale is another hit.

As to financing again later, at least fannie mae treats a BK followed by a foreclosure as "One event" being the date of the BK discharge.  Places like here where lenders let foreclosures drag on for years were casuing people to have the clock "reset" by a foreclosure 4-5 years after the BK.