Legal Question in Bankruptcy in Utah
contract contingencies
Is it binding in a a formal repayment plan for a mortgage, to have a contingency clause that grants Noteholder immediate relief from automatic stay if Mortgagor files bankruptcy? Isn't that one of the protections of a chapter 13, to allow you to re-group and resume payments you can afford under the protection of the Bankruptcy Court?
Asked on 7/20/05, 6:38 pm
1 Answer from Attorneys
Alvin Lundgren
Alvin R. Lundgren, L.C.
Re: contract contingencies
Virtually all mortgage notes have such language. This language is not enforceable. If you file bankrupcty you must catch up your arrears either under a Chapter 13 plan or agreement with the lender, and if you keep the agreement you keep the house under the mortgage.
Answered on 7/20/05, 6:55 pm
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