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cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience:  Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
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How are arrears on a mortgage on a home that is underwater

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How are arrears on a mortgage on a home that is underwater treated in a chapter 7 BK?

cortrightlaw : If you are surrendering the home and letting it eventually foreclose then the arrearage is discharged by the chapter 7 bankruptcy. If you are planning on keeping the home you would have to make the arrearage current or they could still foreclose on your home.

Can the arrearage be included in a chapter 13 plan? Would the full amount still need to be paid?

cortrightlaw : Yes in a 13 it could be paid and would need to be paid at 100%. If the second mortgage is unsecured by the value of the home you can strip the mortgage off the home and discharge the debt.
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