The Colorado Supreme Court has ruled that a debtor’s bankruptcy discharge does not accelerate mortgage payments, nor does it trigger the statute of limitations for the remaining payments.
“To what extent does a debtor’s discharge in bankruptcy provide a safe harbor from a bank’s effort to foreclose on the debtor’s home?” wrote Colorado Supreme Court Justice William Hood III, opening the court’s April 24 opinion. “The answer depends in part on whether bankruptcy affects the amount of time that the bank has to enforce a deed of trust securing a mortgage once the debtor is in default. The stakes are high for banks and borrowers, so we weigh in here.”
