Do I need to pay the debt collection firm? 15 Answers as of July 23, 2014

I have a lien on my property from a home equity loan. Our bankruptcy was discharged in 2010. Last year in 2013, I was contacted by a debt collection firm who bought the debt (I think that's how it went) and wanted to know when I would pay it off. They offered to negotiate a settlement. Obviously since my bankruptcy, it's taken some time to get back on our feet. I don't have that kind of money sitting anywhere. Do I have to pay them? Can they foreclose on my house? Thanks for your time.

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Barnhart Law Office
Barnhart Law Office | Bruce C Barnhart
A voluntary lien or mortgage on your home will survive a Chapter 7 bankruptcy. If the debt is not paid, the holder of the lien may foreclose on the home. This is not an uncommon occurrence. The foreclosure can be stopped by the filing of a Chapter 13 Bankruptcy, which can be used to either cure the mortgage default or pay off the mortgage.
Answer Applies to: Nebraska
Replied: 7/23/2014
Stephens Gourley & Bywater | David A. Stephens
If they are properly secured they can foreclose on the home. The debt was discharged as to you, so you have no personal obligation to pay it unless you want to save your home.
Answer Applies to: Nevada
Replied: 7/18/2014
GARCIA & GONZALES, P.C. | Richard N. Gonzales
You have no legal obligation to repay them, but if you are going to keep the home, you will have to work something out with them. I would not sign anything with them without an attorney's approval. I would NOT re-obligate myself to pay this debt - your personal responsibility was discharged in the BK. The lawyer you pay to review this document or negotiate a settlement for you should be experienced in BOTH real estate law, and BK law. Don't "penny wise and pound foolish". Pay someone to help you.
Answer Applies to: Colorado
Replied: 7/18/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Yes, they can foreclose, but if the house is worth less than the first mortgage you can file a chapter 13 bankruptcy and get rid of that second mortgage. See a lawyer asap about this.
Answer Applies to: California
Replied: 7/18/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Yes they can foreclose still, but you are not personally liable for the debt so they cannot sue you for money. If your house is underwater then it is not likely that they will ever try to foreclose. Also, just by contacting you to settle debt after your bankruptcy discharge is a discharge violation for which you may be able to sue them for money damages.
Answer Applies to: New York
Replied: 7/18/2014
    John Ceci PLLC
    John Ceci PLLC | John Ceci
    Debts discharged in bankruptcy do not have to be repaid regardless of who owns the debt.
    Answer Applies to: Michigan
    Replied: 7/18/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    You do not have to repay until you refinance or sell. They cannot foreclose.
    Answer Applies to: California
    Replied: 7/16/2014
    Lynch Law Offices, P.C. | Roseanne N. Lynch
    Yes, they may be able to foreclose on your home but the debt itself was most likely discharged in your Bankruptcy, If you did not reaffirm the loan or refinance it. Foreclosure would be for possession only. The lien however, remains on your property and you will need to deal with that lien at some point when you want to sell. Speak to an attorney because there are some ways to eliminate or reduce the amount of the lien and some programs that may help you.
    Answer Applies to: Illinois
    Replied: 7/16/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    You don't have to personally pay the collector, but there used to be an ad for a car mechanic that said "pay me now, or pay me later." When you sell your home, the collector will be entitled to collect 100% of the lien amount, plus interest and penalties (which will be plenty). Presumably, you are now being offered a discount to resolve this lien now. I typically see a discount of 89% or more in these types of situations, especially where the lien is unsecured.
    Answer Applies to: Nevada
    Replied: 7/16/2014
    Law Office of Peter M. Lively
    Law Office of Peter M. Lively | Peter M. Lively
    You don't have to pay them unless you want to keep the house and avoid the risk of foreclosure. You were discharged from the debt individually, but the lien remained against the real property.
    Answer Applies to: California
    Replied: 7/16/2014
    Arany & Associates
    Arany & Associates | Lawrence C. Arany
    Hello, you have an interesting question! No, you don't have to pay them because the debt was discharged in the bankruptcy. On the other hand, the lien remains a lien and, yes, they do have a right to foreclose on their lien. The fun part: They won't foreclose, because doing so would be costly and, in order to get anything out of the property they would have to pay the first mortgage off, any taxes that are unpaid, and your real estate exemption (or exemptions if anyone else owns an interest in the home.) But on the other hand, sooner or later you are going to sell the property and in order to give good title, you would have to pay off the lien at closing. I have been successful in negotiating mutually acceptable terms to get the 2nd mortgage or home equity line of credit lien holder to release its lien. Its worth something to each of you to do this business - assuming you have equity in the property. Good luck!
    Answer Applies to: Indiana
    Replied: 7/16/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    While the debt may have been discharged through your bankruptcy, the lien survived unless your lawyer filed a motion to strip the lien as part of your case. This would have involved filing an adversary proceeding and it would be reflected in your case file/docket. If your lawyer did not strip the lien, it will remain and have to be paid off when you sell the house. In the meantime, you are under no obligation to pay anything to the original creditor or an assignee. Please contact your lawyer and have him/her send a letter to the company telling them to stop all efforts to collect on a discharged debt.
    Answer Applies to: California
    Replied: 7/18/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Assuming that you didn't reaffirm the mortgage, you don't have to pay them. And they can't foreclose on your house. I'd go through my paperwork and make sure they were listed, call your attorney if you are not sure what you did.
    Answer Applies to: Michigan
    Replied: 7/16/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    The bankruptcy does not extinguish the lien on the house, even if the underlying note was discharged. seek counsel with the details to fully understand your situation.
    Answer Applies to: Michigan
    Replied: 7/16/2014
    Emery, Kast & Walker, PLLC
    Emery, Kast & Walker, PLLC | Felecia Leann Walker
    When they tried to collect the debt they violated your bankruptcy charges and you can bring action against them. You should find an attorney in your area right away. Most attorney's, including my firm, do these on a contingency fee basis. You should know, however, that your bankruptcy does not stop them from foreclosing on your home. They can still do that, the difference is that you will not be responsible for any fees associated with the foreclosure.
    Answer Applies to: Florida
    Replied: 7/16/2014
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