Legal Question in Bankruptcy in California

Re: Lenders Suing

They would have had to petition the court while the BK was pending for the court to determine whether the debt was dischargeable because of fraud. Obviously, they knew about your BK and sought relief to foreclose. That should be all they could do. I would recommend that you move on and not worry.

Re: Lenders Suing

Normally, the bank would have had to file an adversary proceeding (a lawsuit in bankruptcy court alleging fraud) before your discharge. What you probably heard is that banks are suing for fraud after filing bankruptcy, but not after discharge. I have seen a noticeable increase in adversary complaints being filed by banks alleging fraud especially in ELOC cases. However, having said that, it is possible for a bank to reopen a case and then file an adversary complaint, but its burden is pretty high. The bank would have to show that facts existed which it could not have reasonably discovered when you were in bankruptcy.

For this reason, It is recommended that a debtor put on his petition any acts of dishonesty by their mortgage broker, to put the bank, trustee, and the court on notice so as to prevent the bank from saying it could not have discovered the facts during the bankruptcy. In any case, it would be rare for a bank to reopen a case in order to file an adversary complaint. Of the hndreds of bankruptcies I have done, I cannot think of a single case where this has happened.