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

Asked over 1 year ago - Corona, CA

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. Brian Crozier Whitaker

    Contributor Level 17

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    Answered . 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. Justin Drayton Graham

    Contributor Level 13

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    Answered . 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. Antoinette Cara Liewen

    Contributor Level 15

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    Answered . 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... more
  4. Michael Avanesian

    Pro

    Contributor Level 16

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    Answered . 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... more
  5. Susanne Ruiz Rodriguez

    Contributor Level 13

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    Answered . 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... more

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