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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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My wife and I have a 1st mortgage, 2nd mortgage and our home

Resolved Question:

My wife and I have a 1st mortgage, 2nd mortgage and our home also secures a business loan. The order of priority is 1st, business loan, and 2nd. The 1st and business loan are joint and the 2nd is in my name only. If I were to file for individual bankruptcy what happens with the 2nd mortgage? Would my wife solely become responsible for the 1st and the business loan? The house value is less than what is owed on the 1st and the business loan.
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 8 years ago.
Hello,

Your wife's liability on the debts would be unaffected.

Your personal liability on the second mortgage would be discharged. However, the second mortgage would still remain a lien against the property.
Customer: replied 8 years ago.

So does that mean if we ever sold the house in the future, I (after filing bankruptcy) would no matter what have to pay back the lender on the 2nd mortgage to lift that lien?

Expert:  Ellen replied 8 years ago.
Hello,

Absent the agreement of the lender, that is correct.
Customer: replied 8 years ago.
So by filing personal bankruptcy I am not really relieving myself of the debt on the second mortgage thought its my name only?
Expert:  Ellen replied 8 years ago.
Hello,

You are relieving yourself of the personal liability on the mortgage. This means that if your house were to go through foreclosure, the second mortgage holder could not file suit to collect any unpaid monies.

Customer: replied 8 years ago.

What would happen if we didn't go through foreclosure because my wife was able to meet the obligations on the 1st? Then what happens with the 2nd?

Expert:  Ellen replied 8 years ago.
Hello,

If it is not paid, the 2nd can foreclose.
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