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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Im under Ch. 13 right now. I have a first and second mortgage

Customer Question

I'm under Ch. 13 right now. I have a first and second mortgage which is the majority of what is owed on the plan right now, plus car. The arrearages on the first is just about paid off after a little over two years on the plan. The second is what is owed in arrearages the most that is dragging it out another two and a half years. The first and second is with the same bank. Will the bank sometimes negotiate to reduce what's owed on the 2nd?
Submitted: 10 months ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 10 months ago.

cfortunato :

Hi - my name is XXXXX XXXXX I am a Bankruptcy and Consumer Protection attorney here to assist you.

cfortunato :

If the market value of you

cfortunato :

If the market value of your home is less than the balance owed for your first mortgage, then the balance owed for your second mortgage can be discharged upon completion of your Chapter 13.

cfortunato :

Is the market value of your home less than the balance owed for your first mortgage?

Customer:

Are you referring to the market value at the time I went into the bankruptcy plan or right now after making payments?

cfortunato :

That would be at the time you filed your Bankruptcy.

cfortunato :

Actually, the balance owed for your second mortgage can be discharged regardless of the value of your home, but the second mortgage lien can only be removed if the value of your home is less than the balance owed for the first mortgage.

Customer:

Are you referring to the balance of the 1st mortgage plus the arrearages at the time I went into the bankruptcy plan?

cfortunato :

The total balance owed to the first mortgage company - including all arrearages, late fees, attorney fees, added interest, etc.

Customer:

Would the market value be comps or the tax assessors value?

cfortunato :

The tax assessor's value is not usually an accurate determination of the market value of property. Comps are acceptable, as are a realtor's estimation of what a property can be sold for.

cfortunato :

The market value is the amount that a property can actually be sold for, and can therefore only be an estimate.

Customer:

Then definitely, the total was more than the comps and now the tax assessors value has come down too from what it was at the time. If the arrearanges for the 1st are just about paid off and the 2nd is what is keeping the bankruptcy going, what then needs to be done to get the 2nd discharged? I have four more months on the arrearages for the 1st?

cfortunato :

Your plan has to be completed in order to have the balance owed for the second mortgage discharged.

Customer:

Right now, I have to pay 100% of unsecured debt. I'm getting ready to request to lower plan payments because my pay has decreased 3.5 an hour. I'm also hoping they'll reduce the 100%. So, I have to keep making regular payments until the plan is up and whatever I have left will be discharged? Will the 100% of pay to claim make a difference on whether any left over will get discharged?

cfortunato :

The balance owed for your second mortgage can be discharged upon completion of your plan, even if your monthly payments are reduced. (I think this is what you wanted to know.)

Customer:

What needs to be filed to get it discharged. The BK court may not know the balance was more than the comps at the time of filing?

cfortunato :

The balance owed will be automatically discharged upon completion of your plan. Are you asking what has to be done to have the lien removed?

Customer:

yes

cfortunato :

You have to file a "522(f) Lien Avoidance" motion with the clerk at the Bankruptcy court. You can file this motion at any time before your case is closed. If you do not have an attorney to file this motion for you, you can get the necessary forms and instructions from the clerk at the Bankruptcy court.

Customer:

ok, thank you very much.

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and other Bankruptcy Law Specialists are ready to help you

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