12 Sep Discharged Debtor Signs Mortgage Modification to Help Former Co-Debtor
Reaffirming a debt, especially a mortgage debt, is not a decision that should be entered into lightly as I discuss in more detail on my Atlanta bankruptcy web site. I recently received an email from a lady who apparently discharged her personal liability for a mortgage in a Chapter 7 then post-discharge entered into a “mortgage modification” that put her back on the hook:
Im on a home loan with my x-boyfriend after the break up I filed chapter 7 in 2005 it was discharged. He lives in the home in FLorida and Ive been living in Georgia for the past 7 years. He stopped making payments on the house and went into foreclousure procedings. Since he will not refinace the home to remove my name. I am still on the mortgage. My question is,In 2008 in order to stop foreclousure proccedings and my name is still on the mortgage I had to sign a modification he paid 5,000 to stop the foreclosure and to keep the house. What does modification and bankruptys mean for me? The mortgage company verbally tells me over the phone I am not finacialy responsiable but wont give me anything in writting. I am trying to assume a home loan here in Georgia but since on the credit reports my name is listed on the mortgage they are having second thoughts about givng me a home loan.
Does this modification take me out of the bankruptys law that I filed thru Georgia in 2005 and make me responsiable agian for that loan? What is the diffrence from assuming a loan and a modification? Did I have to sign a modification just because my name is on the loan? Does my bankrupty still stand and make me not responsiable finacialy for the loan.
Here are my thoughts: Assuming that you did not reaffirm the mortgage loan back in 2005, your personal liability on the mortgage debt was eliminated when your Chapter 7 was discharged. Your name may have remained on the title, but the mortgage company should not have kept you as an obligee on the mortgage note.
If you signed a post-bankruptcy modification you very well may have re-obligated yourself on this mortgage. There is at least an argument that you have voluntarily agreed to accept responsibility for payment of the modified obligation.
I am thinking however that the mortgage lender may some exposure here. When the Chapter 7 discharge was entered, the lender should have taken affirmative steps to remove your name as a borrower. This means that this mortgage debt should not have appeared on your credit reports and I’m not so sure that the mortgage company should have even been communicating with you in writing or verbally.
This is a situation where you may want to speak to an attorney knowledgeable about FDCPA claims. You need to determine whether there is anything you can do to get your name removed from this loan and off your credit report, and I think that you are going to need legal help to do this.
Jonathan Ginsberg, Esq.
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