I had one part of my business went bad and forced me into bankruptcy. The bank I deal with has a First Mortgage on my home and a Second Mortgage also.
Can I have the second Mortgage discharged with the Bankruptcy without them taking my House or calling the Loan on my First Mortgage?
Yes you can. I am assuing you are talking about filing a Chapter 13 and stripping off or getting rid of your second. That is allowable if the values are correct regardless of who the mortgage companies are. The home must appraise for less than the first mortgage in order to do it. Some jurisdictions require you to file a motion to do this and in our jurisdiction we are required to file a separate lawsuit to accomplish this. That law suit is called an adversary suit. You can only do this is the values are correct and you file a chapter 13.
Good luck and get rid of that second.
The loan will be discharge in a chapter 7, but to get rid of the lien, you might have to file a chapter 13 to strip it from the property. And yes, it would not matter about the same lender. The first cannot claim default if you are current on the first.
The personal obligation can be discharged, but the lien cannot be removed unless you file for Chapter 13 AND the payoff on the first is more than the value of the house.
Mr. Goldstein is a Virginia-licensed attorney only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation. Contacting Mitchell Goldstein or the Goldstein Law Group does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised.
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