Legal Question in Bankruptcy in Georgia

I loaned my son and former daughter-in-law $60K to remodel their home in Washington D.C. At the suggestion of his attorney, a DEED IN TRUST was recorded and a SECURED NOTE was signed by all.

Two years later, my son lost his job, subsequently divorced, relocated to GA which is where I also reside. Shortly after arriving, he filed for bankruptcy and has proceeded to default on ALL debts.

Thou there is enough equity in his home to satisfy the existing primary mortgage, the fore mentioned security note and then some, I am becoming increasingly concerned about how to go about recouping my investment for the following reasons:

1) Despite the deed in trust and secured note, the bankruptcy attorney failed to list the above loan as a debt or me as a creditor on my son's bankruptcy petition. I was only recently made of aware of this and the bankruptcy is well along in the process.

2) The primary mortgage is listed on the bankruptcy petition. It is also secured by a deed of trust in both my son�s and ex-wife�s name and remains so even. Title to the home was granted to my son in the divorce settlement. To date, the lender has not yet taken any steps to foreclosure on the home thou it is in default.

3) The bankruptcy trustee is gun-ho to liquidate my son�s assets including the home in D.C. and has petitioned the court to do so despite the home is occupied by his ex-wife (who�s is still financially liable per the security deed for half the mortgages and who is not a participant in the bankruptcy) and children.

The �default clause� in the note signed by my son and ex-wife states upon notification of default the borrower as 30 days to make current any past debt that is owed. If he/she does not do so �.. �the borrower shall immediately and permanently convey to the lender full legal and equitable rights to the property and grant the lender irrevocable power to sell the property without further notice or consent of borrower for satisfaction of debts secured by said property �.

Does the above clause provide me the right to sell or foreclose the property�.WITHOUT seeking permission from or involving the bankruptcy court?

If not, how can I ensure the bankruptcy court recognizes my right�s as a creditor�though I am not even listed as such on the petition?

Lastly, I assume I need a legal eagle to act on my behalf. But I am not sure if I should contact a attorney who deals with bankruptcies or one who deals with real estate foreclosures??

2 Answers from Attorneys

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