Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.
If you file Chapter 7, the the first or second lienholder has the right to foreclose on the property. Even if you were to reaffirm the first mortgage, that won't stop the second from trying to foreclose.
If the second were to do this, it would owe the first lienholder any proceeds up to the payoff amount.
Thus, the only way to keep the house would be to reaffirm both mortgages.
No. A 13 would require you to pay both the first and second as well in order to keep the property.
Let me back up a little - in a chapter 7, your credit card debts can be discharged. Also, your first and second mortgage obligation can be discharged as well, but if that happens, you would lose the house as it would be returned to the lender through foreclosure.
If you want to keep the house in a chapter 7, you would have to reaffirm both mortgages.
Then to keep the house, which is worth maybe 1/3 of the mortgage payoff, is there anything I can do to reaffirm the first and dump the second AND get rid of credit card debt? In other words, is there any other alternative? I worked too hard to provide for others and need a place to stay!
A friend had similar situation and was able to get rid of her second through cha pter 13. I'm so confused...
There is a possibility to reduce or eliminate the amount you owe on your second mortgage through a chapter 13 if the lien is "wholly undersecured".
This means that the property is not worth more than the first mortgage balance. In your initial post, you indicated that your mortgages combined totaled $195,000. I didn't know what part was the first and what part was the second.
However, if you believe your house is worth $130,000, and your first mortgage balance is more than that, your second would be wholly unsecured and would be subject to elimination as an unsecured debt. However, if your first mortgage has a balance of less than $130,000, your second would not be wholly unsecured, and you could not get rid of it in full. However, you could try to reduce the amount you repay by the home's value.
In your friend's case, the debt was likely wholly unsecured.
However, if you file a 13, you're likely to have to pay all of your credit card debts back as well.
As an example for my own "research," suppose I had 35K in credit card debt, car is paid for, the 1st is $146K, and the 2nd is approximately $48K, house is worth $120-135K. What would I be looking at as far as which debt MUST be repaid?
Approximately how much would a monthly plan be (using average trustee and attorney fees)? Are all plans for 5 years?
Would an attorney negotiate balances for credit card repayment amounts?
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