California judgment -- impact after a Chapter 7 bankruptcy

Discussion in 'Bankruptcy' started by BetaB4, Jun 11, 2009.

  1. BetaB4

    BetaB4 Guest

    On another non-Usenet forum someone posted the following situation and I am
    wondering if anyone here can offer any information or suggestions:

    The poster reported that he filed a no-asset Chapter 7 bankruptcy in
    California and recently received a final discharge. Apparently, he had a
    property with a first and second mortgage and there was a foreclosure on the
    property before his bankruptcy filing. Now, after the bankruptcy, he said
    there is a judgment against him which shows up on his credit report.

    Here's part of what he wrote,

    "I live in CA. The house was foreclosed in San Diego and they placed a lien
    on me in Los Angeles county. I do not own real estate now. I foreclosed and
    the bank sold the debt to a debt collector. They filed a default judgment
    against me in court for the 2nd mortgage. I'm worried the lien will affect
    my future purchase of a home."

    He did have an attorney represent him in the bankruptcy filing, and his
    attorney indicated to him that maybe he (the attorney) would need to file a
    motion to re-open the bankruptcy case and then get the bankruptcy court to
    void the outstanding judgment. The problem is that it would cost a lot of
    money to do that.

    My thinking is that most likely the outstanding judgment is an unsecured
    debt based on a deficiency judgment following the foreclosure, and that
    underlying unsecured debt would automatically be discharged as part of the
    no-asset Chapter 7 bankruptcy proceeding whether or not it was actually
    listed as a known debt at the time of the bankruptcy filing. If that's
    correct, and the underlying debt is an unsecured debt, wouldn't the judgment
    now be null and void, and wouldn't the judgment holder be obligated under
    the FDCPA to release the judgment and cause it to be removed from the
    judgment index?

    Would one option for this person be to get a copy of his credit reports,
    then write back to the 3 credit reporting agencies and state that the
    judgment is for a debt that was discharged in bankruptcy and should be
    removed from his credit reports?
    BetaB4, Jun 11, 2009
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  2. BetaB4

    sttriker Guest

    he needs to look at his discharge paperwork. If the 2nd mortgage is
    included, just send the copy of the discharge papers to the credit
    agencies, they will have to take it off.

    If the 2nd was not included in the Chapter 7, I would make the
    attorney correct it for free. I mean, really? The attorney forgot
    about a mortgage?

    If there really is a judgement he would have to get some documentation
    showing that a collection agency bought that debt. Then he would have
    to show the court that somehow this debt was missed. Once he can prove
    that he had that debt at the time of filing then it should not be that
    hard to get that included into the bankruptcy.

    From what I understand it is a few pieces of paperwork that will have
    to be filed at the court, but I would call the attorney and get it
    done for free, that is a pretty big mistake.

    sttriker, Jun 24, 2009
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