There is a practice stemming from the mortgage and foreclosure crisis known as “show me the note.” This is the practice of forcing mortgage companies to provide proof that the company owns the mortgage note prior to foreclosing on a property.
In an age when many mortgages are bundling loans, it is difficult for companies to produce the original mortgage document. Some homeowners here in Kansas and throughout the country have likely been able to stay in their homes due to demands for the missing documents.
In a twist to the process, however, Bank of America has developed a new strategy to fight the foreclosure defense. Bank of America is seeking to quell the practice by suing the trustee of Chapter 13 bankruptcy in Nashville.
Chapter 13 bankruptcy is not an avoidance of debt. A payment plan is set up for the claimant. As long as the claimant complies with all the court required payments, the debt will be discharged within 3 to 5 years. The purpose of Chapter 13 is to help clients to pay off their debts while protecting important assets, such as a home.
Pending an outcome to this suit, it’s not possible to say how Bank of America’s tactic might affect foreclosure and Chapter 13 bankruptcy efforts. For now, Chapter 13 is still a viable way for consumers to put their lives back together. There are still opportunities for those swimming in debt to find relief.
Debt does not have to mean a lifetime of headaches, there is relief available through the legal system. Potential clients who are facing home foreclosure or who are behind on debt payments may be able to utilize bankruptcy to help manage their debt and get back on track.
Source: Nashville Business Journal, “Bank of America sues Nashville bankruptcy trustee,” Annie Johnson, July 27, 2012; FindLaw.com, “Chapter 13 Bankruptcy,”
- The situations described in this post are similar to those handled by our firm. To get more information about our practice, please visit our Chapter 13 bankruptcy page.