Filing for bankruptcy in order to pause a foreclosure action is a fairly common tactic. Hanson & Payne regularly assists Milwaukee area property owners and lenders in these cases.
Repeatedly filing for bankruptcy and taking other legal actions that delay your eviction for over 20 years is not. That’s why it made headlines when news reports revealed some guy had been living in a home he only made one mortgage payment on for over two decades.
Living Rent Free
According to the New York Post, a man named Guramrit Hanspal “bought” a home on Long Island for $290,000 in 1998. He made just one mortgage payment to his lender, Washington Mutual, then defaulted on the loan.
By May 2000, Washington Mutual successfully foreclosed on the home, and Hanspal was “forever barred” from any claim to the property, according to the judgment of foreclosure.
But Hanspal never left. By January 2001, he filed his first bankruptcy claim, records show. He went on to file another in November 2001, two in 2002 and one in 2003…
Meanwhile, in 2004, Hanspal transferred the deed of the home to a friend, Rajender Pal, even though he had no legal right to do so, according to court papers. Pal, using the Kenmore Street address, filed for bankruptcy in 2005, staving off eviction yet again…
By 2008, Washington Mutual had gone under, marking one of the largest bank collapses in American history, with its assets eventually taken over by JP Morgan Chase.
The new bank was also unable to boot Hanspal, and has been locked in litigation with him for years, with Hanspal filing at least three lawsuits against JP Morgan Chase in Nassau Supreme Court. The two sides are also in an ongoing legal battle in Brooklyn federal court.
Hanspal claims in court papers that Chase committed “blatant fraud” in 2010 by trying to evict him when it didn’t have proper title to the home, and accused the bank of withholding “surplus” funds from a previous auction of the property.
Chase slammed Hanspal for “clogging the court docket” with “patently frivolous” claims.
By May 2018, Chase unloaded the property to Diamond Ridge, which offered Hanspal $20,000 to leave. He didn’t take the deal, and instead, filed for bankruptcy again in 2019 and 2020. Another purported occupant of the house, Boss Chawla, filed bankruptcy four times in 2019, as did another resident — allegedly named John Smith — who filed once.
The Post estimates Hanspal has likely saved himself/defrauded his lenders of over $440,000 by not paying his bills for the past two decades. The Hanson & Payne team has seen a lot of crazy stuff during our careers, but nothing like this.
Bankruptcy Is A Tool Not A Weapon
Filing for bankruptcy in order to stop a foreclosure is not uncommon, but in normal circumstances, the stop is a pause, not a complete halt. Filing for bankruptcy does not make a mortgage disappear, or free you from making mortgage payments while still living in your home.
If you want to stay in your home, you will need to keep making mortgage payments. It may, however, be possible to renegotiate the terms of your loan, and that is something our experienced team of bankruptcy attorneys can assist you with.
If finding a new, more affordable place to live is an option you are willing to consider, the Hanson & Payne team can help you get rid of your current property and work towards getting out of debt.
A Milwaukee Bankruptcy Attorney You Can Count On
Milwaukee area debtors who are considering filing bankruptcy just to avoid foreclosure should proceed with caution. Bankruptcy is meant to be used as a tool, not a weapon. Rather than making risky legal moves that could give you the kind of negative publicity Mr. Hanspal is getting, you should contact the Hanson & Payne team for some sound advice. We will listen to your side of the story, and work with you to find a path forward.