Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
I'm going to try to help answer your question.
I am assuming that you filed a chapter 7 bankruptcy from which you received a discharge. If you retain the home then you must continue to pay any second mortgage in addition to the first mortgage as it is a lien on the property. Even though you are no longer personally liable if you retain the home you must continue to make payments on any liens associated with the home if you wish to keep it. If you did not retain the home and surrender it as part of your bankruptcy then you will not have any obligation for the second mortgage or any liens on the property.
I hope this information is helpful and I wish you the best of luck.
If you are still in the home and paying the first mortgage you are correct that at this stage the second lien will be out of luck. Thank you for clarifying the fact pattern.
Ok, thanks for the clarification. A bankruptcy will never satisfy a lien. The only way a lien is satisfied is when it is paid in full. A bankruptcy does discharge your personal obligation with regards ***** ***** first or second mortgage, or other lien. Thus, your personal obligation on the second mortgage is discharged but the lien remains against the property. The only way you would not be required to pay this at the sale is because the bank did not pursue collection within 6 months. Bear in mind that while in bankruptcy their efforts to collect are stayed unless they obtain relief from the stay. If 6 months has elapsed since discharge you should be good. The other advice you need is from a title company as that is who will actually have to sign off on what does or does not need to be paid in accordance with title insurance. Sometimes even though you may be legally able to not pay the second mortgage lien a title company may not be willing to sign off and issue insurance unless it is paid. I know that sounds unfair but I would suggest you resolve that question as well. If you are utilizing a realtor I would inquire what title company they use and pose the question to the title process closer as well just to be abundantly careful.