Thinking of filing chapter 7 - questions about car & house

[kwitza]

Hi everyone,
My husband and I have been considering filing chapter 7 but we have alot of questions. Before I even make an appointment with an attorney I've done alot of research but there are 2 things I can't seem to find answers for... I'm hoping someone on here can help.
First I'm sure we qualify as far as the mean income my hubby makes about 42k a year and there are 5 in our household. I know our debts may not seem like alot to some people but with 3 kids on a limited income we cant seem to get ahead- we also had a business fail and the collection calls keep coming.
So my first question is this- we paid 72k for our house and still owe about 67K we also have a second mortgage (hsbc home equity line of credit) for about 19k. We got both about 6 years ago when the housing market was much better. Our house right now where we live (ohio) is probably only worth about 60K. We are current on our mortgage and would like to keep our house by reaffirming. Ok so my question- can a second mortgage be discharged with a chapter 7?? Our other debt is about 10k and we might not even consider filing if we can't eliminate the home equity loan too- it is our biggest debt payment, 14% interest, and the biggest drain on our finances.
My second question is about our car. We would also like to keep it-(we are current on its payments too) however my Step-father co-signed for us. If we file chapter 7 but reaffirm the car loan would it show anywhere on his credit? Would he have to be involved with the bankruptcy process? We don't want to effect anyone elses credit because of our financial situation.

Thanks in advance for any advice!!

[robbadobb]

2nd mortgage

Hello..I am in Ohio also. My BK is discharged. We kept our house, but could not file Chapter 7 on our 2nd mortgage. It is a line of credit with Wells Fargo. Our equity was used as "collateral", so the loan is linked to our house. Couldn't do it. I'm not sure with a car, we didnt have any car loans. Hope this helped.

[RickInMich]

Someone with more knowledge will respond, I'm sure, but I will say that in most circumstances you cannot escape that 2nd mortgage! We are in the same boat. I've looked at all our options.

However, if the amount you owe on the 1st mortgage is higher than what the value the home would appraise for, you can have that 2nd mortgage "lein stripped." But if I'm not mistaken, you can only do that through a Chapter 13. But with only $10,000 in credit cards, I think you would do fine in a Chapter 13 if you didn't have that 2nd mortgage.

[TomBrady]

New to bankruptcy also but just read this in the nolo book and it seems to apply in your situation:

"If someone co-signed a loan or otherwise took on a joint obligation with you that person can be helf wholly responsible for the debt. If you recieve a Chapter 7 bankruptcy discharge you may no longer be responsible for the debt but your co-signer will remain on the hook. Especially if your co-signer is a friend or a relative."