If 1st is kept current, but second in 6mos. late and file ch7,foreclosure?

[drowningfast]

I have my first and second with Chase. Their in house modification raised my payment by $100! WAJ! I have more calls from creditors than from customers. I run a carpet cleaning business.

I'm considering CH7 but will keep current on the first through the whole thing. I'll just let the second go.

What's the chance they will foreclose?

[justbroke]

What's the chance they will foreclose?

No one can answer that. Since Chase holds both mortgages, they hold old the cards. They will suffer no more from closing on the second, than they would have closing on the first. If you're in a strict foreclosure State, then they may foreclose the second anyhow and evict you.

When seeking to use this type of strategy, you must always weigh the downside. The downside is that Chase calls your bluff, moves for Relief from the Automatic Stay (RFS) and then proceeds with foreclosure on the 2nd. You have to be willing and be able to deal with that possibility.

It's a strategy. You always need a Plan B.

[spidge]

Great timing. I am 15 months behind on my 2nd that has no collateral and the first has modified and is on time. I would like to file BK 7 and settle with the 2nd afterward.
I know the ideal situation is to be current on both upon filing a ch 7, but the 2nd(BofA) had me pay four months of trial payments and did not do anything for me. I never even recieved any kind of answer from them so decided to just stop paying again. So could I still file a ch 7 and negotiate the lien afterward?

[jennilynn]

2nds and 7

Definately talk to an attorney before using this tactic.

Just because the 1st is current, doesn't mean they can't go with foreclosing on the 2nd. Now whether they will or not, it's anyone's guess. Their legal dept. would review the file. You run a risk of them moving for Relief from Stay and taking the house in foreclosure.

Since Chase holds both in the original post, there's a very real chance they could see a benefit of foreclosing... it's anyones guess.

Basically in a 7 if you aren't current with mortgages or cars, you can and many do lose the property to the creditor...

You may be able to push for a modification by filing. so it's something to weigh heavily to decide if it's the way you want to go and hope it works in your favor, but realize the plan could backfire.

I worked in bankruptcy for years and in a 7 we would not file unless the accounts were current if the client wanted to keep the property. Too much risk to lose it.

[justbroke]

spidge, for you, the 2nd is probably charged off. You probably have a different lender on your second as well, right? That's the best position to be in, unless you're in one of those strict foreclosure States. I think the problem is when the same bank holds both mortgages, that defaulting on the junior mortgage, "could" cause some headache.

[Overmylimit]

So I am very close to discharge (fingers crossed) I am current with my 1st and my 2nd I haven't paid in over a year both different banks. I too was worried about being current with both going into the Chp 7 but I didn't have a choice. I will let you know in a few days if it backfires or not...

[Overmylimit]

Oh and my 2nd was charged off months ago, but that still doesn't release the lien...

[spidge]

My second is with a different lender than the first, but what seems to be encouraged is to work through a modification with both and once current file the BK7. Correct? But within the BK7 I do not have to reafirm both mortgages and therefore stop paying the second to encourage a settlement. The problem is that they would know I filed a BK7 and they could simply wait out that time period leaving the lien in tact. Correct? The lien will never go away and although I may have not made a payment to that mortgage beyond the statute of limitations how would the lien be delt with?

[pcn]

Can someone please define "strict foreclosure State"?

[albacore44]

Same boat here as Overmylimit, However i filed being current on both mortgages. but I stopped paying the 2nd HSBC after my 341. i just passed 30 days PD on 4/10, and my discharge date is 5/9.

Whats funny is they have been calling non stop. i answered one day, and said you know i filed for BK, and someone in an indian accent said we have no record of it, so they continue to call, and I ignore it. as far as I'm concerned, they were notified, i see them on my Creditors matrix in my court documents, if they did not process it, not my problem. After my discharge, I will simply tell them, I'm sorry to inform you, I now owe you nothing.

[helpmeout]

Same boat here as Overmylimit, However i filed being current on both mortgages. but I stopped paying the 2nd HSBC after my 341. i just passed 30 days PD on 4/10, and my discharge date is 5/9.

Whats funny is they have been calling non stop. i answered one day, and said you know i filed for BK, and someone in an indian accent said we have no record of it, so they continue to call, and I ignore it. as far as I'm concerned, they were notified, i see them on my Creditors matrix in my court documents, if they did not process it, not my problem. After my discharge, I will simply tell them, I'm sorry to inform you, I now owe you nothing.

If they continue to call you can sue them for violation of the stay. Let your attorney know what is going on and that you did verbally inform them.

[albacore44]

If they continue to call you can sue them for violation of the stay. Let your attorney know what is going on and that you did verbally inform them.

True, I prefer to just let it ride, and tell them, suprise-suprise after my discharge

[spidge]

Same boat here as Overmylimit, However i filed being current on both mortgages. but I stopped paying the 2nd HSBC after my 341. i just passed 30 days PD on 4/10, and my discharge date is 5/9.

Whats funny is they have been calling non stop. i answered one day, and said you know i filed for BK, and someone in an indian accent said we have no record of it, so they continue to call, and I ignore it. as far as I'm concerned, they were notified, i see them on my Creditors matrix in my court documents, if they did not process it, not my problem. After my discharge, I will simply tell them, I'm sorry to inform you, I now owe you nothing.

What does this do for the lien on your property though?

Their right to collect may go away but their right to the asset will not.

[albacore44]

What does this do for the lien on your property though?

Their right to collect may go away but their right to the asset will not.

I'll have to wait and see............plan is to offer a settlement sometime down the road

[CCsAreEvil]

Wouldn't the 2nd being charged off a step in the right direction? Doesn't that say that they do not plan to collect the debt ever? So, as long as home prices stay as they are or even lower more, a settlement negotiation to remove the lien seems more likely to go through.