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Is my 2nd lien get wiped from BK13 converted to BK7 and get discharge from BK7?: I filed a BK13 in 4/2009 then converted it to BK7 and get a standard discharge on July 2012. During the course of BK13 I also filed a motion to avoid the 2nd lien.

Now, the 2nd lien sold to a third party and they have contacted me. They said something like ... since I have discharge from BK7 so I no longer personal liable for the debt. Instead the debt attached to the property. And if I stayed on the property I have to pay the property debt!

Is my 2nd lien get wiped from BK7?

Asked over 5 years ago in Bankruptcy

Andrew’s answer: No, at least in California, Chapter 7 cannot avoid ("strip") a second mortgage on real property. The lien strip in the chapter 13 only happens when you complete the chapter 13 plan and receive a discharge.

When you converted to chapter 7, you lost the "lien strip." So you have no personal liability (if the bank forecloses they can't come after you for the second mortgage), but it is still on the house.

You can potentially file another chapter 13 at this point to strip the 2nd (called a "chapter 20") or try to settle with the 2nd mortgage, but it remains on the house. I would strongly advise you get a free consultation on the matter.

Hope this helps!

Answered over 5 years ago.

Will filing Chapter 7 bankruptcy stop my current IRS wage garnishment?: I currently have a wage garnishment in place set by the IRS. It is EXTREMELY high, $750 per pay period, every two weeks!! I cannot afford this and owe them way too much. I am considering filing for bankruptcy but prior to, would like to know if the garnishment will go away once I file. If so, how long after I file will, the garnishment stop? The taxes owed are three years or older.

Asked over 5 years ago in Chapter 7

Andrew’s answer: The garnishment would start as soon as you file the case. Practically speaking, you want to file in enough time to inform your payroll department so they can stop the garnishment.

However, be very careful with assuming the taxes are dischargeable. Timing is very important and there are lots of dangers in this area. In addition to needing to have been due at least three years ago, there are requirements for filing of the taxes, for recent assessments, and if the IRS has filed a lien against you that could affect things as well. You don't want to jump into a chapter 7 cases just to know you'll be back in the garnishment four months later when the case ends. There could be timing issues that help you in a chapter 7, or reasons to file a chapter 13.

The simple answer is the garnishment will stop as soon as you file and inform payroll. The more important answer is to be careful with this area and seek a consultation, particularly as it appears there are a large amount of back taxes due.

Hope this helps!

Answered over 5 years ago.

If the court finds the causes for mortgage litigation against a servicer are valid, will that halt a foreclosure until resolved?: Let's say I received a notice of sale on my house, but my attorney filed for litigation against the servicer(s) based on the Home Owner's Bill of Rights violations and requests a TRO. Will that halt the foreclosure process until the litigation has been resolved one way or another? If not, under what mortgage violations would be sufficient to halt the foreclosure process? Even if it doesn't halt, would the status of litigation on the property scare away buyers until the litigation is done?

Asked almost 6 years ago in Foreclosure

Andrew’s answer: I agree with Atty Shirdel. Two additional points:

1) courts often require a homeowner, if successful on the TRO, to pay monthly "rent" similar to the mortgage payment to an escrow account because they find it unfair to live there rent-free during the time while the claims are resolved,

2) it can be an uphill battle getting a TRO granted because there are a lot of firms out there that sue with zero chance of success, and a lot of scams. I'm not saying yours is, but they are aware that a lot of lawsuits are just stall tactics and therefore hesitant to stop foreclosures unless there is a real likelihood of success.

Answered almost 6 years ago.