You are here: / / THE DISCHARGE IN BANKRUPTCY DID NOT ACCELERATE THE DEBT AND THEREFORE DID...
, ,

THE DISCHARGE IN BANKRUPTCY DID NOT ACCELERATE THE DEBT AND THEREFORE DID NOT START THE STATUTE OF LIMITATIONS RUNNING; THE IN REM FORECLOSURE ACTION REMAINS VIABLE (FOURTH DEPT).

The Fourth Department, in a full-fledged opinion by Justice Carni, determined that the mortgage debt was not accelerated by a discharge in bankruptcy, therefore the statute of limitations was not triggered and an in rem foreclosure action remains viable:

… [O]nce a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” … . “Where the acceleration . . . is made optional with the holder of the note and mortgage, some affirmative action must be taken evidencing the holder’s election to take advantage of the accelerating provision, and until such action has been taken the provision has no operation” … . Here, the mortgage provided plaintiff the option to accelerate the debt under certain circumstances, but did not state that the debt would be automatically accelerated if defendant obtained a discharge in bankruptcy.

We reject defendant’s contention that the discharge in bankruptcy automatically accelerated the debt and thus triggered the statute of limitations with respect to the entire debt … .

“[E]ven after the debtor’s personal obligations have been extinguished [by chapter 7 discharge], the mortgage holder still retains a right to payment in the form of its right to the proceeds from the sale of the debtor’s property,” and a bankruptcy proceeding does not “impair [the mortgage holder’s] right to commence an action against [the debtor] in rem to seek payment from the proceeds of a foreclosure sale” … . … [C]hapter 7 discharge removes the “mode of enforc[ement]” against the debtor in personam, but the obligation otherwise remains intact and does not impact an action in rem … . Wilmington Sav. Fund Socy., FSB v Fernandez, 2019 NY Slip Op 08290, Fourth Dept 11-15-19

 

You might also like
CORRESPONDENCE BETWEEN THE TOWN AND THE PROPERTY OWNER AMOUNTED TO AN AGREEMENT TO AGREE, NOT AN ENFORCEABLE SETTLEMENT AGREEMENT ALLOWING CONSTRUCTION; SUPREME COURT’S DIRECTIVES TO THE TOWN ENCROACHED UPON THE TOWN’S ADMINISTRATIVE AUTHORITY (FOURTH DEPT).
PERIODS OF POSTRELEASE SUPERVISION MERGE AND CANNOT RUN CONSECUTIVELY, ILLEGAL SENTENCE MUST BE CORRECTED EVEN IF ISSUE NOT RAISED ON APPEAL (FOURTH DEPT).
THE MAJORITY HELD THE INSTALLATION OF AN AIR TANK ON A FLATBED TRAILER WAS NOT A COVERED ACTIVITY UNDER LABOR LAW 240(1); THE DISSENT ARGUED THE TRAILER WAS A “STRUCTURE” WITHIN THE MEANING OF THE STATUTE (FOURTH DEPT). ​
Defendant Should Have Been Adjudicated a Youthful Offender; Waiver of Appeal Not Valid
Police Officer Struck by Plaintiffs’ Decedents When the Officer Was Making a U-Turn to Follow a Car Was Entitled to Summary Judgment Under the Statutory “Reckless Disregard” Standard
COMPLAINT DID NOT STATE A CAUSE OF ACTION FOR PRIMA FACIE TORT, ELEMENTS EXPLAINED (FOURTH DEPT)
Indictment Rendered Duplicitous by Trial Evidence Required Reversal
ALTHOUGH BAIL-SETTING IS NOT APPEALABLE, WHETHER THE BAIL-SETTING COURT COMPLIED WITH THE CONSTITUTIONAL OR STATUTORY STANDARDS INHIBITING EXCESSIVE BAIL IS A PROPER SUBJECT FOR A HABEAS CORPUS PETITION; HERE THE BAIL-SETTNG COURT DID NOT COMPLY WITH CPL 510.30; MATTER REMITTED (FOURTH DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

THE FAILURE TO AWARD DAMAGES FOR FUTURE PAIN AND SUFFERING AND FUTURE ECONOMIC... QUESTIONS OF FACT ABOUT THE EXISTENCE OF A DANGEROUS CONDITION, WHETHER THE...