Legal Question in Bankruptcy in California

Unrecorded deed of trust in bankruptcy

I am writing on behalf of a friend who has limited English. He bought a house in 1993 and gave two deeds of trust - one to an institution lender and another to the seller. Seller did not record the deed of trust. MY friend then filed for Chapter 7 in 1996. The bank's loan was reaffirmed, and the seller's loan got listed as an unsecured loan and was discharged. My friend kept the house. The seller recorded the deed of trust in 1997, almost a year after the bankruptcy case was closed. In April 2003, the seller sold the note to a 3d party, who has instituted foreclosure proceedings against my friend, almost 10 years after the original deed of trust was signed. My friend was under the impression that he did not owe them any money as he never got any notices or complaints from the original seller in all these 10 years, including his bankruptcy. Can they now foreclose upon his house?


Asked on 9/14/03, 12:08 pm

2 Answers from Attorneys
Robert Mccoy Law Office Of Robert McCoy

Re: Unrecorded deed of trust in bankruptcy

Yes, probably, but there may be a statute of limitations issue depending on the circumstances. Also, many options are available to your friend, including a re-fi, payment plan and a negotiated settlement. If you will call me I can get more info and advise you of your options--909-467-1169

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Answered on 9/15/03, 12:58 am
Robert F. Cohen Law Office of Robert F. Cohen

Re: Unrecorded deed of trust in bankruptcy

Whether a deed of trust is recorded or not is of no consequence in terms of the dischargeability of the debt. The debt was secured at the time of the BK, and the security in the real property would remain. Your friend should immediately consult with a bankruptcy and/or real estate attorney in his/her area to see how to further deal with this matter immediately.

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Answered on 9/14/03, 12:20 pm


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