Question re:580b protection against claim in Chapter 13

[Kazoo]

I live in California. I filed for a Chapter 13 for a $100,000 outstanding unsecured debt of $100,000 from a HELOC on a second home that foreclosed 2 years ago. I also added in the second mortgage on my existing home for $110,000 and attempted to do a lein strip on the second mortgage. The lender agreed to remove the lein, but now the trustee is objecting to the plan. The payment they want me to make is way too high. It looks like it is going to be dismissed.

We are looking at letting our current home go into foreclosure to settle the debt on our existing home. We plan to refile for chapter 13 after foreclosure to pay 100% back on the $100,000 debt from the old HELOC. My understanding under California Code Of Civil Procedure Section 580b, the lender cannot seek a deficiency judgment so long as the loan was 100% cash financed loan and I never refinanced.

I know I meet the 580b-d criteria, however, I am concerned that there is some legal loophole where I will be on the hook to pay some deficiency on my existing home.

The reason this is a concern is if I am on the hook for this amount, then I al looking at quite a bit more to pay back. Does anyone know how the California Code Of Civil Procedure Section 580b factors on the creditors ability to submit a valid claim in a Chapter 13?

Please help.

[Kazoo]

Anyone??

[lrprn]

Section 580b is specific to California. We aren't bk lawyers - just regular folks from all over the country who filed bk and are sharing our experiences with each other. Unless we have a current California member here who was impacted by this state law and may have some reliable consumer knowledge about it to share, unfortunately we aren't going to be able help you sort this one out. You need a real legal opinion.

Assuming you filed your 13 with a CA lawyer, what does your lawyer who does understand Section 580b have to say about this situation?

[Kazoo]

I am sure he dose, but it is hard to get in touch with them. I kind of feel like I need to get as much information as I can to make sure to ask the right questions. Thank you for your response and honesty. This has been a real stressful time.

What he did tell me was they could not come after me for a balance. At the time, we were not going down the path we are now. I know the code prevents the lender from seeking a judgement, but I am not sure a creditor needs to have a judgement for a trustee to include balance owed in a repayment plan.

I plan on doing a 100% payback on $100,000 after giving my house back. If they add another $110,000 on that... Well ... I guess I am up a river with no paddle..

Anyway.. Thanks again