QUESTION
What happens to the second mortgage and the lien?
Asked on Nov 14th, 2013 on Bankruptcy - California
More details to this question:
After divorce, wife refinanced house in her name and I quit claimed the title to her. We had a second mortgage and it was in my name only. I have since filed Chapter 7 bankruptcy.
7 ANSWERS
Bankruptcy discharges your personal liability but the lien remains unless you are able and do in fact have it stripped as part of a Chapter 13 bankruptcy.
Answered on Nov 19th, 2013 at 6:17 PM
If you get a bankruptcy discharge, you will no longer be liable for the second mortgage. However, the lien still remains on the house.
Answered on Nov 19th, 2013 at 6:13 PM
Debt Settlement Attorney serving San Diego, CA
at
Law Offices of Kathryn Tokarska
Update Your Profile
The second mortgage is discharged as to you unless you reaffirmed the mortgage in your chapter 7 bankruptcy, which would have been foolish. Your ex-wife remains liable on the second mortgage and the loan is secured by a deed of trust on the property.
Answered on Nov 19th, 2013 at 6:06 PM
Although you have no legal obligation to pay this debt due to your bankruptcy discharge, the 2nd mortgage lien remains and will have to be paid off when the property is sold or refinanced. While the 2nd could foreclose at any time, in many instances it makes no sense economically to do this. Another option would be for the ex to make an offer to settle the 2nd mortgage for a lump sum, especially if the property is worth less than the balance on the 1st.
Answered on Nov 19th, 2013 at 5:54 PM
Deborah F. Bowinski
Not enough information here. Did your ex-wife's refi roll the first and second loans into one, or did she just refinance the first only?
Answered on Nov 19th, 2013 at 3:14 AM
3 Awards
The loan will remain on the house, but you are no longer responsible on the loan. They cannot collect against you if the house should ever foreclose.
Answered on Nov 15th, 2013 at 10:18 PM
Bankruptcy Attorney serving Walnut Creek, CA
at
Alan E. Ramos Law Offices
Update Your Profile
Typically, when a property is refinanced all of the loans are paid off. If you can't verify this with your ex-spouse, you can check with the county recorder's office to see if a reconveyance was recorded. If you filed a Chapter 7, your discharge should have covered any personal liability that you may have had for the loan.
Answered on Nov 15th, 2013 at 10:16 PM