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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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My domestic partner died and I need to file bankruptcy. Our

Resolved Question:

My domestic partner died and I need to file bankruptcy. Our mortgage is under water. If I file bankruptcy, I can continue to pay the primary mortgage, but we have a second, line of credit, mortgage that I need to get rid of. The problem is, I now have $150,000 equity after the first mortgage. The line of credit is $360,000. Theoretically, the second mortager could force a sale if I stop paying. Is it possible to use, say, a Nevada LLC, to establish a second mortgage that would wipe out that $150,000 equity after the first mortgage? Is it possible to use that "second" (third) mortgage to prohibit the present line of credit mortager to foreclose? I'm in Virginia.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 7 years ago.



There is no way to interpose a new loan between the 1st and 2nd mortgages, so as to make it impossible for the 2nd to foreclose on the existing equity -- except to pay off the 2nd and then terminate the credit line, before you record any new lien.


If you file bankruptcy, your unsecured debts will be discharged. But, if the 2nd mortgage is not paid, then the lender can foreclose and force the sale of the property to recover the $150,000 in equity.


Hope this helps.


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