Will I be liable for the balance of a loan after auction? 25 Answers as of July 03, 2013

My Ex was granted a chapter 7. We have our names on a 20 year boat loan that if sold or auctioned would be less than owed. The file has (according to the bank) an automatic stay in affect from her filing. How long does the automatic stay exist?

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Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
It has no benefit to you, so the lender can come after you right now, although it seems from your facts that it is not planning to until her case closes.
Answer Applies to: Michigan
Replied: 7/22/2011
Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
In a chapter 7, the automatic stay will usually last as long as the case is open until the case is discharged or closed, whichever happens first. Once that occurs, the automatic stay is lifted. If your ex filed for chapter 7 bankruptcy and has the automatic stay in effect now, you're probably safe for the time being, however, you may be responsible for this debt after the stay is lifted, since your name is also on the note, and the bankruptcy would only discharge her liability on it. You may want to find out what her intention is with the property-if she intended to surrender, reaffirm or redeem the property and if the payments are current or not. If she's current on it and intends to keep the property, then there wouldn't be a reason for them to pursue this debt against you. Of course, if this is not the case, you are probably solely on the hook for it after the bankruptcy discharges her liability on the debt.
Answer Applies to: California
Replied: 7/15/2011
Law Office of Asaph Abrams
Law Office of Asaph Abrams | Asaph Abrams
Unfortunately, your ex's chapter 7 discharge will not afford you-the cosigner/codebtorprotection from the deficiency claim. In a community property state such as California, protections do apply to non-filing spouses of bankruptcy debtors pursuant to the provisions of 11 U.S.C. 524(a)(3)
Answer Applies to: California
Replied: 7/15/2011
Engberg Law Office
Engberg Law Office | Harry A. Engberg
Until the Chapter 7 discharge is granted to your ex. Normally 60 days after the 341 meeting or about 90 days after filing.
Answer Applies to: South Dakota
Replied: 7/15/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
The stay exists until the case is closed or dismissed or the court enters an order lifting the stay. When the stay is lifted the creditor will seek to collect the unsecured deficiency remaining after auction of the collateral from you.
Answer Applies to: Georgia
Replied: 7/15/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    If only your ex filed for bankruptcy, the stay only applies to her. The bank can come after you as soon as they realize that you did not file.
    Answer Applies to: Colorado
    Replied: 7/15/2011
    Guardian Law Group PLLC
    Guardian Law Group PLLC | C. David Hester
    The automatic stay will remain until the creditor petitions the court to have it removed or the discharge is granted. At that time you will be solely responsible for the loan and willneed to: 1)make the payments; 2)allow it to be recovered and resold by creditor. Your options then will be that you are responsible for the difference between the auction/resale price and the original balance, or complete your own bankruptcy to elliminate yourresponsibility on the debt.You may be able to cut a deal with the creditorby voluntarily turning in the boat, in which they waive the difference, butit really depends on the creditor and how convincing you are when you negotiate with them, but ultimately you will be responsible.
    Answer Applies to: Utah
    Replied: 7/15/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Her bankruptcy does not protect you at all. It makes you a target. You may, if you had a well-written divorce decree, have rights to prevent her discharging the debt. You should see a lawyer immediately. Note that preventing her discharge does not mean they can't sue you but it may help you avoid problems. Deadlines are short. Act immediately and do NOT talk to her or her lawyer at all.
    Answer Applies to: Georgia
    Replied: 7/15/2011
    Tucker Legal Clinic
    Tucker Legal Clinic | Samuel Tucker
    Yes. As to stay part of the question the stay is inforce for the ex effectively forever. As to you the stay is never in place.
    Answer Applies to: Mississippi
    Replied: 7/15/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Yes
    Answer Applies to: Maryland
    Replied: 7/15/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    If she has elected to surrender the boat and not keep and pay for it, then after the discharge, the creditor will be able to go after you for the deficiency from the proceeds of sale.
    Answer Applies to: Indiana
    Replied: 7/3/2013
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    If I correctly understand your situation, when she is discharged the discharge injunction will protect her from the debt permanently. However, since you refer to her as "Ex", and don't mention that you have filed bankruptcy, you have no protection at all from her bankruptcy, and the bank can seek repayment from you for any deficiency. Moreover, if you don't pay it, the IRS can seek income tax on the unpaid portion pursuant to the "forgiveness of debt" doctrine.
    Answer Applies to: California
    Replied: 7/15/2011
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    Yes, if you cosigned a boat loan with your ex-spouse, and the boat is ultimately auctioned for less than is owed, you could be liable for the remaining debt, the "deficiency." You may have other defenses to the debt. If you are sued for it, I recommend that you hire a consumer rights attorney to defend you. If you have significant other debts in addition to the boat loan, or if a judgment for the boat loan debt is taken against you, you may want to consult a consumer bankruptcy attorney about filing a bankruptcy. The Bankruptcy Code Section 362(c) provides that the automatic stay of an act against property lasts until property is no longer property of the estate. The automatic stay of any other acts continues until the earliest of the time that the chapter 7 case is closed, dismissed, or a discharge is granted.
    Answer Applies to: Texas
    Replied: 7/15/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Until she gets a discharge, which is at a minimum 60 days past her hearing date. You will be liable for the deficiency balance unless you file your own bankruptcy case.
    Answer Applies to: California
    Replied: 7/15/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    An automatic stay regarding secured property ends upon discharge. The debtor does not have to pay a deficiency if there is one. If there is a non-filing co-debtor that person is responsible for a deficiency.
    Answer Applies to: California
    Replied: 7/15/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Until her case is closed. Note that the date she receives her discharge and the closing date may be two different points in time. If you are on the loan, the discharge will eliminate her liability, but they can then repossess and come after you for any deficiency.
    Answer Applies to: California
    Replied: 7/15/2011
    Ray Fisher Law Offices
    Ray Fisher Law Offices | Ray Fisher
    Will I be liable for the balance of a loan after auction? No. The automatic stay is a temporary injunction that lasts until you get a discharge. The discharge converts the temporary injunction into a permanent one.
    Answer Applies to: Texas
    Replied: 7/15/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    The automatic stay is in effect until either she is discharged (usually about 4 months after filing) or the company petitions the court to lift the stay. However, you need to know that her stay doesn't protect you, only her. The company will come after you for any deficiency if she discharged the note in her bankruptcy.
    Answer Applies to: Michigan
    Replied: 7/15/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    The Automatic Stay continues until the Bankruptcy is completed unless the creditor moves for relief.
    Answer Applies to: Washington
    Replied: 7/15/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    The stay protects her, not you. If you're both liable, the bankruptcy will release her liability and put it all on you.
    Answer Applies to: Virginia
    Replied: 7/15/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    The automatic stay remains in place during the pendency of the case, unless the court grants a motion for relief from stay.
    Answer Applies to: Ohio
    Replied: 7/15/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    Yes, you will be liable if you did not file. The Automatic stay is in effect from date of filing to date of discharge unless they file a Motion for Relief From Stay.
    Answer Applies to: California
    Replied: 7/15/2011
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