What is the effect of a Chapter 7 bankruptcy discharge on a mortgage? What happens during the bankruptcy process in regard to the debt. In California the most common thing used to secure a loan when purchasing real estate it through a deed of trust. It is different than a mortgage because a mortgage actually.
On occasion we will receive a client who has had a parent or other family member pass leaving behind assets not worth a lot. There will be enough there to worry about but the idea of the expense and time needed to handle a full on estate administration seems daunting taking into consideration the amount.
The process of getting a fresh start through bankruptcy covers quite a broad spectrum of things. The things people think of first are the unsecured debts incurred for consumer goods and services; the burdensome credit cards that have high interest rates and extra charges for any infraction of a multipage agreement written in fine print.
We have all heard horror stories of homeowners in foreclosure and at the same time in negotiations with their lender under the auspices of an informal “stay” only to learn that the Lender has proceeded with the sale process. The homeowner only learns at the very last-minute that a pending Trustee Sale auction will proceed upon.