Have you put a lien on the house for $10,000 .?
Please explain?
Got this from an article. Hopr it help.
January 20, 2002
YOUR HOME; Tying Up A House With a Lien
By JAY ROMANO
MOST homeowners are aware that disputes with a home improvement contractor can result in frustration, annoyance and even, in some cases, litigation. What many people do not know, however, is that such disputes can also lead the contractor to file a lien against the property even before the matter is ultimately resolved in the courts.
Such a lien – commonly called a mechanic’s lien – can make it hard or impossible for a homeowner to sell the property while the lien is in place and can even result in a foreclosure action being started by the contractor. And while most states provide for some form of mechanic’s liens, the procedures and requirements for filing such liens vary, sometimes considerably, from state to state.
‘‘A mechanic’s lien is a creature of statute,’’ said C. Jaye Berger, a Manhattan lawyer who specializes in real estate and construction law. ‘‘It is a way for a contractor to place on the record the fact that he’s owed money for doing something that improves someone’s property.’’
Ms. Berger said a fundamental element of a mechanic’s lien was that the work for which payment was being sought must have improved the property upon which the lien was being placed.
‘‘If you owed money to a grocery store, the grocer couldn’t put a mechanic’s lien on your house,’’ she said, adding that situations often arose that were less obvious than that. Interior decorators, for example, typically cannot file a mechanic’s lien for services they have performed for a homeowner.
‘‘An interior decorator usually isn’t doing something that improves the real estate,’’ she said. At the same time, Ms. Berger said, contractors who are hired to carry out a decorator’s suggestions probably can file a mechanic’s lien if not paid for their services.
In New York, Ms. Berger said, mechanic’s liens are filed in the office of the county clerk where the property is situated. Once properly filed, she said, a mechanic’s lien – like an outstanding mortgage – is an impediment to clear title.
‘‘In other words, if you were about to sell your house and a mechanic’s lien shows up on the buyer’s title search, the lender is going to want the lien cleared up before it will allow the buyer to close,’’ she said. The same thing would happen, Ms. Berger said, if a homeowner whose property was subject to a mechanic’s lien tried to refinance his or her mortgage.
And while a contractor does not need a homeowner’s permission to file a mechanic’s lien – and, in New York, can do so without first notifying the homeowner – there are stringent requirements that must be met for such a lien to be valid.
Ms. Berger explained that once a mechanic’s lien was filed with the county clerk’s office, the contractor must notify the homeowner of the filing by sending a copy of the lien by both regular and certified mail within 30 days of the filing date. After that is done, she said, the contractor must provide the clerk with an ‘‘affidavit of service’’ advising the clerk that the homeowner has been properly notified of the lien’s filing.
In New York, Ms. Berger said, even a properly filed mechanic’s lien does not last forever. ‘‘The lien lasts for one year unless it is renewed, and it can only be renewed for one more year,’’ she said, adding that the lien automatically expires after a year – two years if it is renewed – unless the contractor has started a lawsuit to foreclose.
A subcontractor and those who provide materials to the general contractor can file such liens as well. Ms. Berger explained that if a contractor has been paid in full by the homeowner, the subcontractors generally do not have a right to file a mechanic’s lien against the property. If the contractor has not been paid in full, however, the subcontractors can usually file such a lien if they have not been paid by the contractor.
‘‘A contractor has an obligation to pay his subcontractors and suppliers,’’ Ms. Berger said. ‘‘He can’t just take the money and buy a boat.’’ Finally, Ms. Berger said, if a contractor files a mechanic’s lien for more than the amount actually owed by the homeowner, the contractor could be subject to a significant penalty.
‘‘If a contractor has willfully exaggerated the amount due, and the homeowner can prove it, the contractor is liable for treble damages,’’ she said. Thus, if the outstanding balance on a contractor’s bill is $30,000 and the contractor files a lien for $60,000, the homeowner could be entitled to $90,000 in damages – or three times the $30,000 extra being claimed – plus the homeowner’s legal fees.
Lee Tesser, a lawyer who has offices in Manhattan and in Hackensack, N.J., said New Jersey’s law governing such liens was considerably different than New York’s.
‘‘First of all, it’s called something different,’’ Mr. Tesser said. In New Jersey, mechanic’s liens are called construction liens. Another difference, he said, is that while New York law allows a contractor to file a lien based upon an oral contract, New Jersey law requires a written contract. ‘‘The contract can be written on the back of a napkin, but it must be in writing,’’ Mr. Tesser said.
New Jersey law also requires the contractor to take some preliminary steps before filing a construction lien. For example, he said, the contractor must file a Notice of Unpaid Balance – with the owner and with the county clerk where the property is situated – indicating the amount the contractor says is owed. After that, the contractor must submit the proposed lien – along with supporting documentation – to the American Arbitration Association for a ‘‘mini-arbitration hearing’’ at which a determination will be made as to whether a lien is warranted and, if so, the amount of the lien that the contractor may file. Only after those steps have been completed, Mr. Tesser said, can the lien be filed.
‘‘But all that has to take place within 90 days of the last day the contractor worked on the property,’’ he said, adding that New Jersey construction liens automatically expire after a year (there is no renewal period) unless the contractor has started foreclosure proceedings.
In Connecticut, still-different rules apply. William Selsberg, a Stamford real estate lawyer, said that while mechanic’s liens in Connecticut must be filed within 90 days of the last day the contractor was on the job, a properly filed lien was effective not from the day it was filed but retroactively to the day work was started.
What that means, Mr. Selsberg said, is that a person who is buying a home that has clear title on the day of closing could end up with a mechanic’s lien against the property after title passes hands. In other words, he said, if the seller hired a contractor shortly before closing to make repairs requested by the buyer, and then sold the property to the buyer before paying the contractor, the contractor could file a lien against the property, now owned by the new buyer, as long as he does so within 90 days of the last day of work.
‘‘The way to protect against that is to have the sellers sign an affidavit saying either that they have not had any work performed within the last 90 days or that if they have, they have paid the contractor in full,’’ Mr. Selsberg said. When the seller provides such an affidavit, the buyer’s title company will provide insurance against any mechanic’s liens that are the responsibility of the seller.
He added that in situations where a closing is scheduled and there is a mechanic’s lien outstanding against the property, the only way the seller can force the contractor to remove the lien is by posting a bond covering the entire amount due.
And while sellers often try to negotiate a voluntary discharge of the lien in exchange for placing the amount in dispute into escrow, contractors may refuse the offer. ‘‘When a contractor has reached a point where has decided to file a lien,’’ Mr. Selsberg said, ‘‘you can be pretty sure he’s not going to be a happy camper.’’
Correction: January 27, 2002, Sunday The Your Home column last Sunday, about mechanic’s liens – claims against property filed by contractors – misstated the penalty in New York for exaggerating the amount of money owed. A contractor who willfully overstates the debt is liable for the difference between the actual amount and the amount claimed in the lien, not three times that amount.
Thanks for that information. So now should I put a lien against the property even though I have a Quit Claim Deed? Will I be suing myself? I don’t know what to do. I know I have not filed my deed yet. Should I? What can I do right now to assume ownership? Thats all I really need to know. I need to find out where to go from here. Since she doesn’t live there anymore who would I send the Certified Letter to. Myself? I have total occupancy of the property. The mortgage is still in her name. I cannot have her benefit off the repairs I had in this house. She had this house looking horrible. I brought it up to market value. What options do I have right now to get ownership of this property and sell or re-fi? Do I let the Chapter 13 get released by not paying the mortgage then file my QCD and sell the property. Please tell me what direction I should go.
Ask an attorney for free advice.
http://bankruptcy-law.freeadvice.com/consumer_bankruptcy/switch_chapters.htm
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html
If in ch 13. It might be protected, I am not an attorney. You probably already know that you should recorded the Deed.But any way, please seek legal council. This is not my field of expertise. I am not a real estate or bk law attorney.
Chapter 13
Individual Debt Adjustment
The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)
a. Background
b. Advantages of Chapter 13
c. Chapter 13 Eligibility
d. How Chapter 13 Works
e. The Chapter 13 Plan and Confirmation Hearing
f. Making the Plan Work
g. The Chapter 13 Discharge
h. The Chapter 13 Hardship Discharge
Background
A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” (1) If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. §1322(d). During this time the law forbids creditors from starting or continuing collection efforts.
This chapter discusses six aspects of a chapter 13 proceeding: the advantages of choosing chapter 13, the chapter 13 eligibility requirements, how a chapter 13 proceeding works, what may be included in chapter 13 repayment plan and how it is confirmed, making the plan work, and the special chapter 13 discharge.
Advantages of Chapter 13
Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time. Another advantage of chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on “consumer debts.” This provision may protect co-signers. Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.
Chapter 13 Eligibility
Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual’s unsecured debts are less than $307,675 and secured debts are less than $922,975. 11 U.S.C. § 109(e). These amounts are adjusted periodically to reflect changes in the consumer price index. A corporation or partnership may not be a chapter 13 debtor. Id.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
How Chapter 13 Works
A chapter 13 case begins by filing a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. Unless the court orders otherwise, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). The debtor must also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. 11 U.S.C. § 521. The debtor must provide the chapter 13 case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). (The Official Forms may be purchased at legal stationery stores or downloaded from the Internet at www.uscourts.gov/bkforms/index.html. They are not available from the court.)
The courts must charge a $235 case filing fee and a $39 miscellaneous administrative fee. Normally the fees must be paid to the clerk of the court upon filing. With the court’s permission, however, they may be paid in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006(b). For cause shown, the court may extend the time of any installment, as long as the last installment is paid no later than 180 days after filing the petition. Id. The debtor may also pay the $39 administrative fee in installments. If a joint petition is filed, only one filing fee and one administrative fee are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 1307(c)(2).
In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:
- A list of all creditors and the amounts and nature of their claims;
- The source, amount, and frequency of the debtor’s income;
- A list of all of the debtor’s property; and
- A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household’s financial position.
When an individual files a chapter 13 petition, an impartial trustee is appointed to administer the case. 11 U.S.C. § 1302. In some districts, the U.S. trustee or bankruptcy administrator (2) appoints a standing trustee to serve in all chapter 13 cases. 28 U.S.C. § 586(b). The chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors. 11 U.S.C. § 1302(b).
Filing the petition under chapter 13 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. 11 U.S.C. § 362. Filing the petition does not, however, stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.
Chapter 13 also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a “consumer debt” from any individual who is liable along with the debtor. 11 U.S.C. § 1301(a). Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose. 11 U.S.C. § 101(8).
Individuals may use a chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition.11 U.S.C. § 1322(c). The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the chapter 13 filing.
Between 20 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the debtor files. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan.11 U.S.C. § 343. If a husband and wife file a joint petition, they both must attend the creditors’ meeting and answer questions. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the creditors’ meeting. 11 U.S.C. § 341(c). The parties typically resolve problems with the plan either during or shortly after the creditors’ meeting. Generally, the debtor can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting.
In a chapter 13 case, to participate in distributions from the bankruptcy estate, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed file a proof of claim.11 U.S.C. § 502(b)(9).
After the meeting of creditors, the debtor, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor’s chapter 13 repayment plan.
The Chapter 13 Plan and Confirmation Hearing
Unless the court grants an extension, the debtor must file a repayment plan with the petition or within 15 days after the petition is filed. Fed. R. Bankr. P. 3015. A plan must be submitted for court approval and must provide for payments of fixed amounts to the trustee on a regular basis, typically biweekly or monthly. The trustee then distributes the funds to creditors according to the terms of the plan, which may offer creditors less than full payment on their claims.
There are three types of claims: priority, secured, and unsecured. Priority claims are those granted special status by the bankruptcy law, such as most taxes and the costs of bankruptcy proceeding. (3) Secured claims are those for which the creditor has the right take back certain property (i.e., the collateral) if the debtor does not pay the underlying debt. In contrast to secured claims, unsecured claims are generally those for which the creditor has no special rights to collect against particular property owned by the debtor.
The plan must pay priority claims in full unless a particular priority creditor agrees to different treatment of the claim or, in the case of a domestic support obligation, unless the debtor contributes all “disposable income” - discussed below - to a five-year plan.11 U.S.C. § 1322(a).
If the debtor wants to keep the collateral securing a particular claim, the plan must provide that the holder of the secured claim receive at least the value of the collateral. If the obligation underlying the secured claim was used the buy the collateral (e.g., a car loan), and the debt was incurred within certain time frames before the bankruptcy filing, the plan must provide for full payment of the debt, not just the value of the collateral (which may be less due to depreciation). Payments to certain secured creditors (i.e., the home mortgage lender), may be made over the original loan repayment schedule (which may be longer than the plan) so long as any arrearage is made up during the plan. The debtor should consult an attorney to determine the proper treatment of secured claims in the plan.
The plan need not pay unsecured claims in full as long it provides that the debtor will pay all projected “disposable income” over an “applicable commitment period,” and as long as unsecured creditors receive at least as much under the plan as they would receive if the debtor’s assets were liquidated under chapter 7. 11 U.S.C. § 1325. In chapter 13, “disposable income” is income (other than child support payments received by the debtor) less amounts reasonably necessary for the maintenance or support of the debtor or dependents and less charitable contributions up to 15% of the debtor’s gross income. If the debtor operates a business, the definition of disposable income excludes those amounts which are necessary for ordinary operating expenses. 11 U.S.C. § 1325(b)(2)(A) and (B). The “applicable commitment period” depends on the debtor’s current monthly income. The applicable commitment period must be three years if current monthly income is less than the state median for a family of the same size - and five years if the current monthly income is greater than a family of the same size. 11 U.S.C. § 1325(d). The plan may be less than the applicable commitment period (three or five years) only if unsecured debt is paid in full over a shorter period.
Within 30 days after filing the bankruptcy case, even if the plan has not yet been approved by the court, the debtor must start making plan payments to the trustee. 11 U.S.C. § 1326(a)(1). If any secured loan payments or lease payments come due before the debtor’s plan is confirmed (typically home and automobile payments), the debtor must make adequate protection payments directly to the secured lender or lessor - deducting the amount paid from the amount that would otherwise be paid to the trustee. Id.
No later than 45 days after the meeting of creditors, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. 11 U.S.C. §§ 1324, 1325. Creditors will receive 25 days’ notice of the hearing and may object to confirmation. Fed. R. Bankr. P. 2002(b). While a variety of objections may be made, the most frequent ones are that payments offered under the plan are less than creditors would receive if the debtor’s assets were liquidated or that the debtor’s plan does not commit all of the debtor’s projected disposable income for the three or five year applicable commitment period.
If the court confirms the plan, the chapter 13 trustee will distribute funds received under the plan “as soon as is practicable.” 11 U.S.C. § 1326(a)(2). If the court declines to confirm the plan, the debtor may file a modified plan. 11 U.S.C. § 1323. The debtor may also convert the case to a liquidation case under chapter 7. (4) 11 U.S.C. § 1307(a). If the court declines to confirm the plan or the modified plan and instead dismisses the case, the court may authorize the trustee to keep some funds for costs, but the trustee must return all remaining funds to the debtor (other than funds already disbursed or due to creditors). 11 U.S.C. § 1326(a)(2).
Occasionally, a change in circumstances may compromise the debtor’s ability to make plan payments. For example, a creditor may object or threaten to object to a plan, or the debtor may inadvertently have failed to list all creditors. In such instances, the plan may be modified either before or after confirmation. 11 U.S.C. §§ 1323, 1329. Modification after confirmation is not limited to an initiative by the debtor, but may be at the request of the trustee or an unsecured creditor. 11 U.S.C. § 1329(a).
Making the Plan Work
The provisions of a confirmed plan bind the debtor and each creditor. 11 U.S.C. § 1327. Once the court confirms the plan, the debtor must make the plan succeed. The debtor must make regular payments to the trustee either directly or through payroll deduction, which will require adjustment to living on a fixed budget for a prolonged period. Furthermore, while confirmation of the plan entitles the debtor to retain property as long as payments are made, the debtor may not incur new debt without consulting the trustee, because additional debt may compromise the debtor’s ability to complete the plan. 11 U.S.C. §§ 1305(c), 1322(a)(1), 1327.
A debtor may make plan payments through payroll deductions. This practice increases the likelihood that payments will be made on time and that the debtor will complete the plan. In any event, if the debtor fails to make the payments due under the confirmed plan, the court may dismiss the case or convert it to a liquidation case under chapter 7 of the Bankruptcy Code. 11 U.S.C. § 1307(c). The court may also dismiss or convert the debtor’s case if the debtor fails to pay any post-filing domestic support obligations (i.e., child support, alimony), or fails to make required tax filings during the case. 11 U.S.C. §§ 1307(c) and (e), 1308, 521.
The Chapter 13 Discharge
The bankruptcy law regarding the scope of the chapter 13 discharge is complex and has recently undergone major changes. Therefore, debtors should consult competent legal counsel prior to filing regarding the scope of the chapter 13 discharge.
A chapter 13 debtor is entitled to a discharge upon completion of all payments under the chapter 13 plan so long as the debtor: (1) certifies (if applicable) that all domestic support obligations that came due prior to making such certification have been paid; (2) has not received a discharge in a prior case filed within a certain time frame (two years for prior chapter 13 cases and four years for prior chapter 7, 11 and 12 cases); and (3) has completed an approved course in financial management (if the U.S. trustee or bankruptcy administrator for the debtor’s district has determined that such courses are available to the debtor). 11 U.S.C. § 1328. The court will not enter the discharge, however, until it determines, after notice and a hearing, that there is no reason to believe there is any pending proceeding that might give rise to a limitation on the debtor’s homestead exemption. 11 U.S.C. § 1328(h).
The discharge releases the debtor from all debts provided for by the plan or disallowed (under section 502), with limited exceptions. Creditors provided for in full or in part under the chapter 13 plan may no longer initiate or continue any legal or other action against the debtor to collect the discharged obligations.
As a general rule, the discharge releases the debtor from all debts provided for by the plan or disallowed, with the exception of certain debts referenced in 11 U.S.C. § 1328. Debts not discharged in chapter 13 include certain long term obligations (such as a home mortgage), debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. To the extent that they are not fully paid under the chapter 13 plan, the debtor will still be responsible for these debts after the bankruptcy case has concluded. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for restitution or damages awarded in a civil case for willful or malicious actions by the debtor that cause personal injury or death to a person will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable. 11 U.S.C. §§ 1328, 523(c); Fed. R. Bankr. P. 4007(c).
The discharge in a chapter 13 case is somewhat broader than in a chapter 7 case. Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property (as opposed to a person), debts incurred to pay nondischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings. 11 U.S.C. § 1328(a).
The Chapter 13 Hardship Discharge
After confirmation of a plan, circumstances may arise that prevent the debtor from completing the plan. In such situations, the debtor may ask the court to grant a “hardship discharge.” 11 U.S.C. § 1328(b). Generally, such a discharge is available only if: (1) the debtor’s failure to complete plan payments is due to circumstances beyond the debtor’s control and through no fault of the debtor; (2) creditors have received at least as much as they would have received in a chapter 7 liquidation case; and (3) modification of the plan is not possible. Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. The hardship discharge is more limited than the discharge described above and does not apply to any debts that are nondischargeable in a chapter 7 case. 11 U.S.C. § 523
You sound frantic and need correct advice. Invest some money into an attorney and find out what you need to do. No one here is going to be able to give you legal advice or a quick fix. This seems to be one of those situations where someone acted too quickly and may now be in hot water. We never like to do our homework, but that’s what its for - to learn in advance so when a situation does arise, we know how to handle it.
Good luck with your house.