Can you discharge your second mortgage in Chapter 7 bankruptcy?

Answer 1

A secured debt, that is something like a mortgage which has a claim on property, always has the right to claim the property as payment for that debt. Bankruptcy doesn't change that.

You will not go bankrupt and have a result where you own MORE than you started with, while others are not getting paid.

Answer 2

Paying it off.

The house and the debt go together. You ain't getting out of one and keeping the other! (Regardless of what you may think bankruptcy is). And just consider: If there was any (hidden) way to get a loan/mortgage/money, 1st or 2nd, and file a few forms and have the obligation to repay it go away and keep everything else...don't you think the line at that filing office would be out the door with every lawyer, their office help, their kids, etc., including the ones that work for all those lenders that give that money away, doing it? Or do you think if there was a way that could happen, lenders would stop giving loans until a law was changed making it impossible?)

Answer 3

: ALL debts and ALL assets MUST be included in any BK filing. You cannot pick and chose what is included. Your entire financial obligations and assets are involved. You go BK, not a debt. : : Each type of obligation or asset are given different priorities (or status) of payment, with assets being used to pay obligations. (Not just some of either). Excess debt may then be discharged by the court. : : Some assets and some debts may be exempt, but they are included and given that status. That basically becomes a court decision. They are included, but NOT dischargeable, like court fines, restitution, child support and some others. Bankruptcy is supposed to give someone so much in debt that they cannot possibly get their way out a fresh start....NOT a head start.

Answer 4

A second mortgage can be stripped only if the property value is less than the amount owed by the first mortgage, and it can ONLY be done in a chpt. 13

ALL of your assets and ALL of your liabilities must be part of you bankruptcy.

Your home mortgages are subject to discharge, with the property being taken to pay the debt, just like any secured debt. In C-13 you must have a plan that brings both debts current and pays them off or the property is sold and the proceeds go to pay the debt - 1st mortgage first, then 2nd - hence the numbering. (No idea what th above is trying to say...but it is entirely wrong).

In both a C-13 or 7 if there is excess it is used to pay other creditors. If there isn't enough generated to pay off the liens, the additional amount owed becoomes an unsecured debt and payable by any other asset you have.

Answer 5

You cant eliminate, but you can "strip-off" the 2nd mortgage if the house value is LESS than the 1st mortgage amount. In that case the 2nd mortgage would no longer be considered secured and would be treated as an unsecured creditor, like a credit card debt.

Answer 6

The second martgage is attached to real property and must be paid. Chapter 13 does not erase collatoralized debt. So, both martgages must be paid to avoid foreclosure.

Answer 7

You don't file BK on a specific debt. All your assets and all your debts must be included.