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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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In Virginia, I have a home with a home equity loan of @61,000

Resolved Question:

In Virginia, I have a home with a home equity loan of @61,000 and a first mort. of 400,000 If I take a chapt 7 bnkrptcy, can I reaffirm the first mortgage and not reaffirm the home equity mortgage. Thereby reducing the amount owed on my home to only the $400,00. The mortgage is with Suntrust Mortgage and the home equity is with Suntrust Bank. I understand they are two separate enities.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 5 years ago.

WebLaw :

*Due to rules of your state bar or mine, nothing herein is intended as legal advice, only intended as general information to better help yourself.*

WebLaw :



Thank you for your question. I am happy to assist you.


The chapter 7 bankruptcy will discharge your personal liability on the home equity mortgage but not the lien on the property. This means if the property were to be foreclosed, the lender could sell the property to satisfy the debt but could not obtain a judgment against you for the unsatisfied portion of the debt. However it also means that you cannot sell the property without paying the mortgage in full

WebLaw :

Only a chapter 13 bankruptcy can strip a mortgage

WebLaw :


Please let me know if you have any questions concerning my answer. Otherwise please click accept.

Customer:

So a chapter 13 if it was taken say 2yrs or so after a 7 would free the lien, because the loan would be paid back but at a much lower rate?

WebLaw :



Chapter 13 bankruptcy can strip off a junior mortgages if the first mortgage equals or exceeds the value of the property. So in theory you could file a chapter 13 a couple years after the 7 to strip the 2nd

Customer:

Thanks.

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