The statute of limitations on any action by a creditor to collect a debt must be made within five years from the date of default or acceleration.  If the statute of limitations expires your lender cannot foreclose.  Nevertheless, the lien remains a burden on the property for at least another 15 years from the date it was originally recorded.  Here’s a closer look at how a discharge of mortgage in bankruptcy affects your property and your creditor’s ability to collect a debt.

When a mortgage is discharged in bankruptcy, the debtor no longer bears personal liability for the loan whether or not the lender was deeded back the property during the bankruptcy proceedings.  Therefore if your mortgage was discharged in bankruptcy you are in fact no longer liable for the debt.  Likewise, any deficiency judgment is wiped out by the bankruptcy and your lender is barred from harassing you for the difference.  However, the lien remains stacked against the property, which means your lender may still legally foreclose on the property as a way to wipe out secondary liens and cover losses.

Even though your lender may proceed with a foreclosure, post discharge, and you may be named as a party of interest in their filing, the foreclosure action is solely against the property, as you’ve been released from liability.  The foreclosure should NOT appear on your credit reports unless it began prior to your bankruptcy filing.

If your lender is attempting to collect from you, they may be in violation of the discharge or state consumer laws, but bear in mind that when it comes to matters of foreclosure it’s always best to consult qualified professionals for guidance.  To learn more about Florida foreclosure laws reach out to your county consumer protection offices or contact your bankruptcy attorney.

Stephen K. Hachey, a Florida real estate attorney can help your wade through this difficult process and determine a positive solution. Contact him at 813-549-0096.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.
This post was written by Stephen Hachey. Follow Stephen on Google, Facebook, Twitter & Linkedin.