In 2003 I filed Chapter 13. In 2007 my mortgage company who held my 2nd mortgage randomly sent me a 1099-C canceling the debt. The bk court kept sending them payments. I have print outs where they applied the monies in buckets like "corporate fund advance"; "late fees"; "NSF fees" etc. Then the print outs stopped, but they keep taking the monies from the court.
Now I'm getting ready to be discharged and they have been scrambling for 5 weeks to straighten out their books. They've acknowledged the cancellation of debt, but say they can still collect the payment; but cannot pursue the payments 'legally'.
I want to refinance but they have a lien on my deed, can they 'legally' keep the lien on the deed? Didn't they commit bankruptcy fraud by collecting payments on a canceled debt?
Get this, they sent me a 2nd 1099-C for June 2008, but then quickly sent a letter stating that it was in error and they fully expect me to pay off the loan. What is going on with this company??