Chapter 7 2nd mortgage/lien understanding - confused

[socalsheep]

I'm pretty confused reading about 2nd mortgage/lien information in Chapter 7. I've begun talking to attornies, and have made an appointment, but am still confused with what I read.

I am thinking of filing Chapter 7 and want to get rid of the property (I will not re-affirm).

Can somebody please answer?

- I have 1st and 2nd mortgages (234 / 43) on my only property in California. I know live in the Midwest (for about 1 year). I refinanced, non-purchase money. 2nd is home equity loan. It was just how they financed based on home value: 80/20. I did not take money out.
- Will the 2nd mortgage go away completely in the BK discharge?
- What does it mean that the lien can stay?
- Is the 2nd lien "secured"?
- Will the bank just foreclosure and take the lien and property back?
- Any other complications? Do I need to consider Ch 13?

I just want to be clear and free of everything and not have anything come back to haunt me.

[LadyInTheRed]

I'm pretty confused reading about 2nd mortgage/lien information in Chapter 7. I've begun talking to attornies, and have made an appointment, but am still confused with what I read.

I am thinking of filing Chapter 7 and want to get rid of the property (I will not re-affirm).

Can somebody please answer?

- I have 1st and 2nd mortgages (234 / 43) on my only property in California. I know live in the Midwest (for about 1 year). I refinanced, non-purchase money. 2nd is home equity loan. It was just how they financed based on home value: 80/20. I did not take money out.
- Will the 2nd mortgage go away completely in the BK discharge? .

If you don't reaffirm, you will no longer have personal responsibility to pay, but the lien will remain on the property.

- What does it mean that the lien can stay?

The bank will still have a security interest in the house. They can foreclose or wait for the house to sell and get paid from the proceeds of the sale if there's anything left after maying the 1st mortgage.

- Is the 2nd lien "secured"?

The short answer: for purposes of a Chap 7, it should be listed as a secured debt. The answer would be different in a Chap 13 where the second is being stripped.

-

Will the bank just foreclosure and take the lien and property back?

I assume you mean the bank holding the 2nd mortgage. If you stop making payments and there is enough equity to justify foreclosure, they would likely foreclose. If there is no equity, they probably won't bother. Instead, they'd wait for the value to increase or let the holder of the 1st mortgage foreclose and hope there is something left for them.

Any other complications? Do I need to consider Ch 13?

That depends on your income, family size and necessary exepenses. If you want to give up the house, the house and mortgages are not reasons to consider a 13.

[iv65536]

I'm pretty confused reading about 2nd mortgage/lien information in Chapter 7. I've begun talking to attornies, and have made an appointment, but am still confused with what I read.

I am thinking of filing Chapter 7 and want to get rid of the property (I will not re-affirm).

Can somebody please answer?

- I have 1st and 2nd mortgages (234 / 43) on my only property in California. I know live in the Midwest (for about 1 year). I refinanced, non-purchase money. 2nd is home equity loan. It was just how they financed based on home value: 80/20. I did not take money out.
- Will the 2nd mortgage go away completely in the BK discharge?
- What does it mean that the lien can stay?
- Is the 2nd lien "secured"?
- Will the bank just foreclosure and take the lien and property back?
- Any other complications? Do I need to consider Ch 13?

I just want to be clear and free of everything and not have anything come back to haunt me.

Once the property is sold and you get the discharge, the 2nd is gone. The status of the lien from the 2nd becomes moot, and this property, if you are surrendering it, would not justify a Chapter 13 if circumstances would otherwise point to Chapter 7. Usual disclaimers apply.