[NV] [NV] Following the reopening of a Chapter 7, can I file a Motion to Enjoin the bank to release insurance funds they are withholding in order to force me into a foreclosure?

Lexi, Chatbot

I understand your concern. Have you already filed for Chapter 7 bankruptcy?

Lexi, Chatbot

Are the insurance funds being withheld related to any specific debts or obligations?

Lexi, Chatbot

Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with your insurance funds issue.

Queeneth E. Esq

Hello, my name is Queeneth. I am an attorney with over 8 years of legal experience. I will do my best to assist you today. First, I need to ask you a few questions to give you the best answer.

Queeneth E. Esq

Yes, you may be able to file a motion to enjoin Wells Fargo (or the bank holding the insurance proceeds) from withholding the insurance funds, but there are key considerations based on your facts:

Since you’ve reopened your Chapter 7 case, you can file a motion in bankruptcy court seeking injunctive relief. You may request a temporary restraining order (TRO) or preliminary injunction to prohibit the bank from withholding or misapplying the insurance proceeds and compel them to release the funds for their proper purpose — repairing property damage.

Under 11 U.S.C. § 105(a), the bankruptcy court has broad power to issue any order necessary to carry out the provisions of the Code.

If the bank is using the withheld funds to pressure you into foreclosure or payment of discharged debt, they may be violating 11 U.S.C. § 524(a). If the insurance proceeds are not tied to a debt, but the bank is wrongfully asserting control, it could be considered bad faith or an abuse of process.

In your motion:

• State that the funds were paid by your insurance carrier for flood repairs, not as mortgage reimbursement.
• Clarify that the bank is not the insured party — the homeowner is.
• Argue that withholding funds in this context causes irreparable harm and violates your property interest.
• Provide proof of discharge, and note that the underlying liens were included in the Chapter 7, even if there was local recording corruption.
• Attach evidence that the property was included in your bankruptcy schedules and that the liens were not reaffirmed.
• File your motion in the reopened Chapter 7 case (use the same case number). You may title it: “Motion for Order to Enjoin Bank From Withholding Insurance Funds and for Injunctive Relief.”
• Serve the motion on Wells Fargo’s counsel or foreclosure unit, the trustee (if still assigned), and the U.S. Trustee.

Be aware that if Wells Fargo is on the mortgage, they may claim an interest in the insurance funds — depending on the loss draft endorsement clause in your mortgage. However, if the debt was discharged and you’re not reaffirming, they may have no right to demand repairs or use the funds to leverage foreclosure.

Hire a bankruptcy attorney in Nevada, preferably one who handles post-discharge motions and foreclosure abuse. Consider filing a separate adversary proceeding if the conduct is especially egregious (for example, if you suspect intentional harassment or a discharge violation).

Queeneth E. Esq

Thank you for the additional information and for clarifying your situation. It’s clear you’re engaged in both federal litigation and a reopened Chapter 7 bankruptcy, and you are trying to stop an illegal foreclosure effort tied to fraudulent liens that should have been discharged.

Since your Chapter 7 case is reopened, the bankruptcy court has jurisdiction to remove or void discharged liens under 11 U.S.C. § 524(a)(1) & (2).

If the liens were included in the original discharge but remain on the title due to fraud, corruption, or error, the court may declare them void as a matter of enforcing the discharge injunction.

The court can also:

• Authorize the sale of the home (free and clear of those liens) under § 363(f), and/or
• Use its equitable powers under § 105(a) to carry out the provisions of the Bankruptcy Code.

In your motion:

• Describe the original bankruptcy, date of discharge, and list that the liens were included and no reaffirmation occurred.
• Attach your Schedule D, discharge order, and creditor matrix showing the lienholders were included.
• State why the case was reopened (fraudulent liens remain, impeding sale, and violating the discharge).
• Argue that the liens are fraudulent or should have been voided under the discharge.

If Wells Fargo or others are knowingly interfering post-discharge, cite 11 U.S.C. § 524(a)(2) (discharge injunction).

Relief Requested:

• Immediate court order striking or voiding the liens (or directing the Recorder to remove them).
• Authorizing sale of the property.
• Declaring any interference a violation of the discharge injunction.
• Including language enjoining Wells Fargo or the Recorder from obstructing title transfer or foreclosure in the meantime.

You can reference your federal case in the motion but don’t rely on it as the only path. Bankruptcy courts move faster and have direct enforcement power over discharge violations and title clearing.

Also consider filing a Motion for Sanctions under Rule 9011 or § 105(a) against Wells Fargo for willful violation of the discharge if they’re interfering with title post-bankruptcy.