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We just received chapter 7 discharge and soon after received a call from our second mortgage asking us to pay our balance

Corona, CA |
Filed under: Bankruptcy

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?

Attorney Answers 5

  1. Best answer

    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.

  2. 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.

  3. 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.

    DISCLAIMER: This answer is provided solely for informational purposes only. This answer does not constitute legal advice, create an attorney-client relationship, or constitute attorney advertising. Liewen Law is fully compliant with every State and Federal Law, including California SB 94 and the related Civil Code Sections, as well as the FTC Mortgage Assistance Relief Services (MARS) Final Rule. Liewen Law is a debt relief agency helping consumers file for bankruptcy relief under the United States Bankruptcy Code. Liewen Law maintains this website for marketing and informational purposes only. None of the information or materials on this site is legal advice. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. Said information is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship. While we make every effort to keep this site accurate and up to date, we do not guarantee its accuracy and are not responsible for inaccuracies, errors, or omissions.

  4. 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.

  5. I would definitely consult a local Chapter 13 attorney to determine if that's the right course of action.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: for more information about my services.

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