Discharge mortgage prepay penalty w/Ch. 7?
My wife and I are in dire need of advice - we can't afford an attorney. But over and over again we get no replies to our postings here. What's up? You guys got something against people from Portland?http://www.bankruptcyforum.com/images/smilies/dry.gif
Anyway - let's try this again. Does anyone know whether mortgage pre-payment penalties can be discharged in Ch. 7? According to documents I've found online, several bankruptcy courts have said they can; several others have said they can't. Those courts that approved a pre-payment fee discharge said the penalty amounts to a violation of Sec. 506(b).
Our first and second mortgages both have 5% prepay penalties. We have no equity beyond our Oregon homestead allowance. If we sell the home and must pay the pre-pay fees, we will likely lose money. If we sell without the pre-pays, we'll make about $10,000 (well below our homestead allowance).
Can we list the pre-pays as dischargeable, unsecured debts?http://www.bankruptcyforum.com/image...ies/unsure.gif
Thanks!
Anyway - let's try this again. Does anyone know whether mortgage pre-payment penalties can be discharged in Ch. 7? According to documents I've found online, several bankruptcy courts have said they can; several others have said they can't. Those courts that approved a pre-payment fee discharge said the penalty amounts to a violation of Sec. 506(b).
Our first and second mortgages both have 5% prepay penalties. We have no equity beyond our Oregon homestead allowance. If we sell the home and must pay the pre-pay fees, we will likely lose money. If we sell without the pre-pays, we'll make about $10,000 (well below our homestead allowance).
Can we list the pre-pays as dischargeable, unsecured debts?http://www.bankruptcyforum.com/image...ies/unsure.gif
Thanks!