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Does my chapter 7 expunge my second trust deed if I want to stay in my home? Thanks

San Diego, CA |

I have filed for chapter 7 bankruptcy. I am also trying to get my first trust deed modified (closed business last year). Will the chapter 7 strip the second trust deed if I want to remain in the home?

Attorney Answers 2


No. The Chapter 7 bankruptcy does not strip the deed of trust. You can only lien strip in a Chapter 13 (or 11). You can not lien strip in a Chapter 7 under the 1991 US Supreme Court case of Dewsnup v Timm.

But the chapter 7 discharges your personal liability after foreclosure.

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One other possibility if you cannot propose a viable Chapter 13 or wish to avoid it, is to try and negotiate and settle the second deed of trust.

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