Mortgage Liens Survive Chapter 7 Bankruptcy Discharge, Allowing In Rem Foreclosures

By John D. Waller, Wooden McLaughlin LLP

Although a Chapter 7 bankruptcy discharge eliminates personal liability for a mortgage loan, a discharge does not erase the debt or the mortgage lien. This means that borrowers will not be on the hook for the money, but lenders still can sue to foreclose the mortgage. Discharged debtors still can lose their property.

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