Bank of America Fined by Bankruptcy Judge

Many people today enter bankruptcy as a result of intolerable mortgage obligations. Too many homeowners owe multiple mortgages on their homes. For those with a first mortgage that is already worth more than the value of their home, a second or third mortgage can be crushing.

Bankruptcy can discharge a borrower’s obligation to pay a mortgage. However, the mortgage issuer in such a situation retains the right to foreclose on the home and recover the property. The mortgage issuer has the right to continue contacting the borrower with respect to the foreclosure process, but is forbidden from attempting to collect the debt.

New York couple Edwin and Michelle Ramos took advantage of this process in their bankruptcy, and their obligation to pay their Bank of America mortgage was discharged. Bank of America, though, continued trying to collect the mortgage debt from the couple after the bankruptcy was completed. The Ramoses contacted their lawyer, who advised Bank of America to stop contacting the couple.

Bank of America never ceased their collection efforts on the mortgage. Recently, however, a bankruptcy judge took his own action to stop the big bank. For each month that Bank of America continues to bother the Ramoses, the bank must pay $10,000 plus attorney’s fees to the court. The judge pointed out that his ruling, though it may seem insignificant to Bank of America, was meant to send a message to creditors looking to collect on discharged debts.

To read more about this ruling, please click here.

If you have a creditor trying to collect money from you after you have obtained a bankruptcy discharge, or you want to file bankruptcy to discharge your personal obligations, please contact us to discuss your options. Contact us using the form on this website or by calling the office at 732-752-8834.