Mortgage Rescission In Bankruptcy

Summary

In Chapter 13 bankruptcy, you cannot rescind a mortgage solely due to insufficient proof of claim. You can challenge the mortgage claim through the proof of claim process by filing an objection if you believe it is invalid. A colorable claim must have legal validity. A mortgage lender may seek to lift the automatic stay if you are behind on payments, the property has little equity, or their interest is not protected. They would file a motion for relief from the automatic stay, typically after resolving the proof of claim issue. Consider consulting a bankruptcy attorney for personalized advice.

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what does the proof of claim process entail
In a Chapter * bankruptcy, the proof of claim process involves the following steps:
- Creditor Filing: Creditors must file a proof of claim to show they are owed money.
- Details: The claim must detail the amount owed and basis for the claim.
- Debtor Review: Debtors review the claim for accuracy.
- Objection: If the debtor disagrees with the claim, they can file an objection.
Are you considering filing an objection to a specific creditor's claim?
what is a colorable claim
A colorable claim is one that appears to have legal validity based on the facts and law. It doesn't have to be strong, but it must not be frivolous or without merit. Are you considering challenging the mortgage claim in your bankruptcy case?
under what conditions the mortgage may try to remove the automatic stay
Case Rating: *
A mortgage lender may try to remove the automatic stay under the following conditions:
- You are behind on mortgage payments.
- The property has little or no equity.
- The lender can show that their interest is not adequately protected.
Are you currently behind on your mortgage payments?
in such case what would they file in court
Case Rating: *
In such a case, the mortgage lender might file a motion for relief from the automatic stay. This motion asks the court to lift the automatic stay so that the lender can proceed with foreclosure or other actions against the property.
Are you currently behind on your mortgage payments?
I assume the creditor would have to do that after the issue of proof of claim is decided
Case Rating: *
You are correct. Typically, the creditor would need to resolve the proof of claim issue before proceeding with a motion for relief from the automatic stay.
Are you currently challenging the proof of claim, or are you considering it?