So I am helping my parents, ages 62 and 65, look into Ch 7. They have $60k in unsecured, $60k in Second Mortgage, and $210k first mortgage. They can not afford to continue to make payments on Second or Unsecured and have spoken with an attorney who feels they can qualify for a 7, despite being over the median, due to expenses.
Now I understand if we stop paying on the second they can foreclose anytime, but since the house is worth no more than $180k, due to the balance on the first we will take the risk and keep paying on the first for now so my parents can stay in their home.
My question is, if my father passes away, which would significantly reduce my parents household income. If at that time, my mother walked away from her home would there be any recourse by the mortgage company or is their only recourse to foreclose on the home because of the bankruptcy. Would this affect her credit at that time?
Now I understand if we stop paying on the second they can foreclose anytime, but since the house is worth no more than $180k, due to the balance on the first we will take the risk and keep paying on the first for now so my parents can stay in their home.
My question is, if my father passes away, which would significantly reduce my parents household income. If at that time, my mother walked away from her home would there be any recourse by the mortgage company or is their only recourse to foreclose on the home because of the bankruptcy. Would this affect her credit at that time?
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