A Chapter 7 bankruptcy will not strip a junior mortgage off of real property. Many individuals who have filed without the assistance of an attorney find out after the fact that they could have benefited by tens of thousands of dollars had the filed a Chapter 13 to eliminate their second mortgage.
In order for a debtor to be eligible for a discharge under Chapter 13, they must not have either a) within the last two years received a discharge under a previous Chapter 13 case or b) within the last four years received a discharge in a Chapter 7, 11 or 12 case.
If you do not qualify for a Chapter 13 due to a recent Chapter 7 bankruptcy filing you may be able to negotiate the settlement and removal of the second mortgage for the same or less than the cost of a Chapter 13.
Similar factor that allow the removal of the lien in a Chapter 13 must exist. First, the second or junior mortgage must be fully unsecured. The greater the property is underwater, the greater the risk to the junior mortgage holder and therefore the greater the chance of settlement.
Second, a demonstrated hardship must exist that places the junior mortgage holder at risk that you will surrender or walk away from the property.
Finally, an ability to pay the settlement amount in lump sum. The junior mortgage holder will not accept a payment plan to settle and remove the lien generally.
For more information see www.secondmortgagesettlementattorneys.com.