QUESTION
If you file for bankruptcy, is it likely that you can re-assume debt for first mortgage to keep your house, but write off the 2nd mortgage/equity line
Asked on Jul 08th, 2016 on Bankruptcy - New Jersey
6 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If you want to keep your house, you'll need to file a Chapter 13 bankruptcy which can wipe out a second mortgage.
Answered on Aug 22nd, 2016 at 6:42 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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You are permitted to try this in a Ch. 13, but not in a Ch. 7 case. It requires an appraisal showing that the fair market value of your homestead is less than the balance due on the first mortgage. Talk to a skilled bankruptcy lawyer; it's almost always worth the investment. Good Luck
Answered on Aug 09th, 2016 at 6:37 PM
The devil will be in the details you have not provided. What is the appraised value of the house? What is the balance to pay off the first mortgage? If the first mortgage is larger than the value of the house, you can apply for lien stripping to remove the second mortgage, but this is only available in the Chapter 13 program.
Answered on Aug 05th, 2016 at 5:40 AM
That's very tricky. Meet with an attorney face to face to discuss numbers. Your question is totally void of numbers.
Answered on Aug 05th, 2016 at 5:38 AM
That can be done in a chapter 13, PROVIDED that there is no equity securing the second mortgage. If there is even one dollar of equity remaining after covering the first mortgage, then you must maintain payments on the second as well. With property values recovering, that is becoming increasingly difficult.
Answered on Aug 04th, 2016 at 10:24 AM
Bankruptcy Law Attorney serving Livingston, NJ
Partner at
Law Office of Stuart M. Nachbar, P.C.
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It is possible in a Chapter 13 to strip off a 2nd Mortgage, but only if the real property is totally underwater by the First Mortgage and it can only be done in a Chapter 13.
Answered on Aug 04th, 2016 at 10:20 AM