Allison J. Schoenthal and Nicole E. Schiavo discuss the conflict between New York's legislation requiring mandatory settlement conferences in foreclosure actions and the Bankruptcy Code's prohibition against a creditor taking any act that can be construed as trying to collect a discharged debt from a debtor. Thus, if a foreclosure action is commenced against a borrower who previously received a discharge on their mortgage loan debt, the lender is left with a “Catch 22”: comply with the CPLR and risk violating the Discharge Injunction, or vice versa.

Foreclosure News



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