I am in MI and he told me if I file chap 7 my 2nd mortgage would sit as a lien on my property and I wouldn't have to pay it if i didn't reaffirm on it - he advised me to stop paying on the mortgage and now I am being foreclosed on for non-payment and I am in a worse position than i was before filing. His office is now vacated and phones disconnected and all attempts of trying to contact him have been fruitful.
He was correct. If you did not reaffirm you would not have to pay, and the lien would stay on your property. That is the law. Whether his advice to stop paying was or was not good advice depends on many more details we don't have, and certainly you had the final call as to whether or not you paid. Even if you had a malpractice claim you would have to show damages, and that would be questionable in most cases. You did not tell us the time frame, but that is another question. Finally, if he is out of business, how are you going to collect?
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Chapter 7 Bankruptcy Attorney
I agree with everything that Mr. Riddle said and only have a few more additional comments.
Whenever I meet with someone who is considering bankruptcy and owns a home with multiple mortgages, we discuss whether a Chapter 13 bankruptcy can be used to get rid of the second mortgage. It most parts of the country, removing a second mortgage in bankruptcy can only be done in Chapter 13 and not Chapter 7.
Some clients the path that you did - filing for Chapter 7 and hope that the second mortgage doesn't foreclose if they stop paying. Sometimes this makes sense. The bankruptcy discharge eliminates the risk of post foreclosure liability and there only remedy is to foreclose to collect on the second if you aren't paying. If a property is worth $200,000 and you owe $250,000 on the first mortgage, why would the second foreclose?
However, there are no guarantees in life. Property values can go up and maybe the second thinks they can get some money.
And as far as the original attorney goes, it isn't like he is responsible for paying your mortgage and it isn't his fault if you spent the money that you would have used to pay the second mortgage.
You should consider talking to another local bankruptcy attorney about using Chapter 13 to get caught up on the second if you wish to keep your home.
First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.
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Your lawyer did not "lie" to you -- he correctly stated the law. He must not have understood that you wanted to keep your house, or else he would not have advised you to stop paying. You can get a clue as to what he thought your intention was by looking at the Statement of Intention that was filed along with your petition -- which you should have reviewed and signed separately.
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