Episode 54 - Chapter 13 Case Study

In this episode of the podcast, we talk about a former client and an aggressive strategy we used to eliminate a potential mortgage deficiency. The client was divorced and her ex-husband kept the property. The problem for our client was that she was still on the Promissory Note and Mortgage. The divorce did not (and can not) eliminate her liability to the lender under the promissory note and mortgage. Years later, the husband passed away and the bank, in this case a credit union, pursued the ex-wife for foreclosure. Credit Unions never (in our experience) waive deficiency, so our client was still financially responsible to pay any deficiency to the Credit Union. The client did not qualify for Chapter 7, so we filed a Chapter 13 reorganization (or payment plan) bankruptcy, with the hope that the Credit Union failed to file a claim in the bankruptcy case (meaning the Credit Union would not get paid). It is an aggressive strategy because if the Credit Union had filed a claim in the bankruptcy case, they would have been entitled to payment and the payments to the bankruptcy court would have been unaffordable. We hope you enjoy this week's episode. If you have questions about how we were able to help her and why it is an aggressive strategy, please listen to the episode, or send us an email - [email protected] or www.YesnerLaw.com.