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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Hello, I have a 650+ credit score and filed BK that was discharged

Resolved Question:

Hello, I have a 650+ credit score and filed BK that was discharged in 2002. I never thought of doing this, but my condo is upside down. It's value is at $60K and I owe $75K. I have a 1st and 2nd mortgage. I've tried to modify the first and was turned down twice because I work, pay my bills and my mortgage isn't part of the government program. I was told to ask the 2nd company who does no loan modifications. The person I spoke too said I had two options: Get either of them to modify you or file BK and cut the 2nd free because I owe them $15K and I'm upside down. I'll never recoop that in 2 - 4 years so it's smarter to file. I hate to lose my great credit but I see no other option that is actually smart. What are your thoughts?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

Do you understand that you must file a Chapter 13 Bankruptcy to eliminate the second mortgage? (For a Chapter 13 the debtor must pay all disposable income to the Bankruptcy court for 3 - 5 years, at the end of which the balance of the second mortgage can be discharged.)

Customer: replied 6 years ago.
Really? NO I wasn't aware of this. So the $123.59 I pay each month just for this mortgage doesn't seem to balance out the hit on my credit plus the "disposable" income I have to pay towards the Chapter 13 just to get rid of it.

Do you see any other solution?
Expert:  cfortunato replied 6 years ago.

There is no way to get rid of the second mortgage - or even to reduce it - without taking a hit to your credit score. I deal with this issue all the time, so I am sure of this fact, and I do wish it were otherwise.

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