What happens after the mortgage has been paid in full after a Chapter 7? 16 Answers as of August 22, 2014

Do I then own the house? I have been discharged from a Chapter 7 bankruptcy. I have been up to date in my payments since the bankruptcy. Will I be considered the owner of the house if the mortgage is paid in full? What would happen to the property if I pay off my mortgage? Is it better to sell the property instead?

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Stephens Gourley & Bywater | David A. Stephens
If you pay the mortgage in full the mortgage is released and the person on the deed then owns the property free and clear of that mortgage.
Answer Applies to: Nevada
Replied: 8/22/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
You own it when you're done paying.
Answer Applies to: New York
Replied: 8/21/2014
A Fresh Start
A Fresh Start | Dorothy G Bunce
Really? You think that the mortgage has been paid in full because your obligation to pay it has been discharged? This isn?t Christmastime & somehow you think Santa has paid off your mortgage? If people got a free house by filing bankruptcy, why wouldn't everyone file bankruptcy? Now that I have dumped a bucket of water over your head, understand that although you don?t owe anything on the mortgage, the property does owe the debt. Don?t pay the mortgage and the property pays with its title going back to the lender through foreclosure.
Answer Applies to: Nevada
Replied: 8/21/2014
Dickson Law Group, LLC
Dickson Law Group, LLC | John P. Dickson
?Once the mortgage is paid off in full, the mortgage company will release the mortgage on your house. If the bankruptcy trustee did not take the house as property of the bankruptcy estate, and if there are no other liens on the house (e.g. second mortgage, HELOC, judgment liens), the house is owned free-and-clear by the record owners on the deed.
Answer Applies to: Illinois
Replied: 8/21/2014
Barnhart Law Office
Barnhart Law Office | Bruce C Barnhart
If the Trustee has abandoned his interest in the house, you are the owner of the house.
Answer Applies to: Nebraska
Replied: 8/21/2014
    EDWARD P RUSSELL | EDWARD P RUSSELL
    After the payments are completed the mortgage company will issue a release that must be filed in the Registry of Deeds for the County in which the land is located.? The property is always owned by the person on the deed and that person can sell it at anytime.? If there is a balance remaining on the mortgage note then the mortgage company will be paid that amount from the proceeds of the sale.
    Answer Applies to: Minnesota
    Replied: 8/21/2014
    Ronald K. Nims LLC | Ronald K. Nims
    A mortgage has two parts, 1st - it's a contract that requires the borrower to repay the lender on the agreed terms. 2nd - it's a lien that gives the lender the right to foreclose on the house if the borrower defaults on the loan. Another aspect of owning real property is that your name is on the deed as owner, going through a Chapter 7 bankruptcy doesn't change that (only a foreclosure or other transfer of the property will change ownership). When you are discharged in a Chapter 7 bankruptcy, the 1st part no longer exists - you're not required to repay the lender but the 2nd part is unchanged, the lender has a lien on the house. If you repay the loan in full, then the lender is required to release the lien on the house (this is exactly the same regardless of whether you went through bankruptcy or not). When the lender releases the lien, since you've been the owner all along, become the owner - free and clear.
    Answer Applies to: Ohio
    Replied: 8/21/2014
    Idaho Bankruptcy Law | Paul Ross
    The satisfaction of the mortgage under the original contract will trigger a release of the debt. Many mortgage providers record this for you, others will send it to you to record. The home will be yours, owned free and clear, assuming there are not other liens or mortgages. Congratulations. No need to sell the property.
    Answer Applies to: Idaho
    Replied: 8/21/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    You are the proud owner of a home without a mortgage. No more, and no less. Congrats!!
    Answer Applies to: Colorado
    Replied: 8/21/2014
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    You were prior to bankruptcy and continue to be the owner of the property. The lender is not the owner, they are the owners of a lien against the property. When the loan is paid off, the lender records a lien satisfaction with the county. Provided you don't currently have or take out other loans against the property you will own the property free and clear. Having filed for Bankruptcy protection doesn't change any of this and should have no impact whatsoever on your decision whether to keep or sell the property.
    Answer Applies to: California
    Replied: 8/21/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    If you pay the mortgage loan in full then the lender will release its lien and you will own the property free and clear of the mortgage lender's interest.
    Answer Applies to: Colorado
    Replied: 8/21/2014
    Law Office of Andrew Oostdyk
    Law Office of Andrew Oostdyk | Andrew Oostdyk
    After the mortgage has been paid in full per the terms of the mortgage, the mortgage company will remove the lien from the property deed. The property deed should already be in your name, but the mortgage company's lien gives them the right to foreclose on the property if the payment terms of the mortgage are not complied with. When a mortgage is discharged through Chapter 7 Bankruptcy, the mortgage company is no longer required to report monthly payments to the Credit Bureaus, this can make getting a new mortgage more difficult as there is not a payment history available.
    Answer Applies to: Texas
    Replied: 8/21/2014
    Danville Law Group | Scott Jordan
    You are the owner of the property. Once you pay the mortgage off, the lender will release its lien on the property. You can do whatever you want with it.
    Answer Applies to: California
    Replied: 8/21/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    If you pay off the mortgage in full, you own the house and the bank is required to record a full reconveyance. You can then sell the house or get a new mortgage, depending on your preference and need. Congratulations on sticking to it and paying off the mortgage.
    Answer Applies to: California
    Replied: 8/21/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    If you paid it off, and if the trustee has abandoned it back to you..... it is yours. You will own it.
    Answer Applies to: California
    Replied: 8/21/2014
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    There is a great deal of confusion about this issue. So first, the rules. A note and mortgage encompass two different types of liability. There is a note. This is a personal promise to pay. Absent the discharge in bankruptcy, the note holder can sue on the note and obtain a judgment that can be collected from any non-exempt asset that you, the debtor own. In virtually all first mortgage cases, lenders do not to this because they can be paid from the property with much less difficulty. Holders of notes secured by a 2nd mortgage can also sue on the note and ignore the mortgage. This happened more and more often in the 2008 - 10 period because after the first mortgage, there was nothing left. Absent the discharge in bankruptcy, the note holder could sue or turn it over for collection. There is another liability. The mortgage. The mortgage is a lien on the property. Unless it is stripped off or something else affirmatively is done to it, it passes through bankruptcy untouched. This means that the mortgage holder can foreclose the mortgage. The remedy is limited to the property because the note has been discharged. In many states, foreclosure of a residential mortgage cannot result in a deficiency but that is another question and is state dependent. In any event, the mortgage can be foreclosed if it is not paid. So, when the mortgage is paid in full, you should own the property. Selling it, or not selling it is something that you need to decide but that is a totally different question. One further point, and it is important. Yes you got your discharge. However, is your case still open for administration? If so, there are other questions that you need to address with your bankruptcy lawyer.
    Answer Applies to: Washington
    Replied: 8/21/2014
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