They threatened us to foreclose on our property if we can't settle the balance on our second. Can we still file for chapter 13 to get rid of our second mortgage?
You can file Ch13 any time; but whether you can get rid of the 2nd mortgage lien depends on whether your house is worth more than what you owe on the 1st.
Real Estate Attorney
It is unsettled in the Central District of California, which includes Corona, whether a debtor can strip a lien in a chapter 13 filed within 4 years of a chapter 7 discharge. It depends on which judge you get.
Real Estate Attorney
If there is no equity to cover the second, your other option is to negotiate with the lien holder. Some of them will settle for an amount significantly lower than the current balance. And, some of them will allow you to pay the settlement in installments. Good luck.
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Your personal obligation on the 2nd mortgage was discharged unless you reaffirmed it. Which means they cannot threaten you or sue you for the money. That said, they still have a lien on the house. If you did not choose surrender the property, and you are behind on the payments, they do have the option to foreclose. As the other attorneys have said, filing a chapter 13 may or may not be a good choice - you should see a local, experienced bankruptcy attorney.
The answers to these questions may be different depending on your individual circumstance and should not be considered as legal advice or the establishment of an attorney-client relationship.
Chapter 11 Bankruptcy Attorney
I would definitely consult a local Chapter 13 attorney to determine if that's the right course of action.
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