Legal Question in Bankruptcy in North Carolina

It looks like my home in another state will be foreclosed on soon. It has a mortgage and an equity line. I understand after the foreclosure the mortgage co and equity line co can attempt to collect the leftover loan amounts from me. If that ocurrs, will bankrupcty discharge those? The mortgage is an FHA loan, if it matters. Also, I'm set to marry in a month. My new spouse has nothing to do with the foreclosed home, or with credit cards that are only in my name that would also be discharged - will he be affected by the bankruptcy though? I read when married, even if filing a personal bankruptcy I'd have to disclose his financial info as well. I would put off the marriage if a bankruptcy will affect him in any way.


Asked on 9/30/09, 9:49 pm

1 Answer from Attorneys
Thomas Zimmerman Zimmerman Law Office

You have to post this question in the state in which the real estate is located. In NC, the lender cannot take a deficiency judgment if the loan was a purchase money loan and it states the same on the note or deed of trust. Otherwise the lender can seek a deficiency judgment and pursue collection remedies. Frankly, I haven't seen much of that. I think it is more rare when the debtor is out of state and perhaps is living under a new married name. In any event, a deficiency balance is discharged in in a successful bankruptcy filing. One should consult a lawyer very early if bankruptcy is a possibility. The income and contribution to household expenses of the new spouse is a factor in determining if the debtor is eligible for a Chapter 7. One does not have to delay a bankruptcy while waiting for a foreclosure. Even if the deficiency is not known, the entire debt is discharged in a bankruptcy. After filing, in a Chapter 7, you have a fresh start. You can be married and allow the bankruptcy process to proceed (approx 90-100 days).

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Answered on 10/06/09, 10:26 am


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