Final question on the Chapter 20 and then I will accept your answer so you can get paid.
The 7 would, as you stated, require we pay off the whole balances (even if not reaffirmed) to get rid of the liens so paying double what the value is now. So essentially we still owe the balances no matter what.
You are also likely correct that they will not negotiate with us on a lump sum settlement or any better terms if we are current before or after a 7, but let me ask you this:
If we Chapter 7 (I do not hire an attorney) we will spend about $300 and it should be a slam dunk based on our bills vs income. The the mortgage debts (along with 45k credit card debt
) will be discharged so no legal obligation to repay mtg loans, but we will have to keep making payments if we want to stay (we do.) We also do not have to reaffirm though so as long as we pay...we stay. BUT...If the debt is discharged, and immediately file for a Chapter 13 arguing the 2nd is not longer secured and want a lien stripping, is this possible and likely? My thought (hope) is the judge would see the 2nd mtg debt is discharged and not reaffirmed in the 7 meaning there is no repayment for this debt required. That would also mean no repayment required on it in a 13? The judge should also see that it is not secured by the value of the home so it should be eligible for the stripping. Q: Can we file a 13 ONLY for a lien removal if we have no debt to place into a plan after a 7 discharge?
Last but not least there does not seem to be anything in the BK code
that says that the plan has to be complete before the lien removal is approved, though many lawyers work on that premise. So why a 36 month plasn at all? Long story short can we file a Chapter 7 and get out of the 45k in credit cards and pay the mortgages anyway (to stay) but then under Chapter 20 try to remove the 2nd lien.
We want the best choice for our situation and goal or removing the 2nd mortgage lien