Had first meeting with attorney- question

[benniebear]

I had my meeting with my attorney today to go over my foreclosure and Chapter 13. He said there is a slight possibility that Countrywide could go after me for a deficiency judgement on my 2nd mortgage.

Has anyone had a 2nd mortgage holder file a deficiency judgement against them in California?

I am really hoping that what my attorney meant by "slight possibility" means this likely won't happen.

Any insights appreciated.

[lrprn]

I had my meeting with my attorney today to go over my foreclosure and Chapter 13. He said there is a slight possibility that Countrywide could go after me for a deficiency judgement on my 2nd mortgage.

Will you be in arrears on your second mortgage when you file? How about your first mortgage?

Ch 13 typically lets you make up mortgage arrears in your plan, so there must be something else going on. Did your lawyer explain why your second mortgage lender might take you to court?

[spell]

It may be different in CA, but filing bk along with a foreclosure creates a new unsecured debt to be repaid in the plan.
But because your ch13 plan should be based off of your disposble income, it should not affect your plan. Just your % repayment.
Have you considered a short sale? You keep more control of the price and terms.

[benniebear]

Hi LRPRN - I am surrendering the house as part of the foreclosure / Chapter 13.

Hi Spell - I've done a ton of searching on the web and what the majority of the information I have found indicates that unless I have assets or a reasonable ability to repay the 2nd, that 2nd lenders rarely go after the debtor for a judgement. I hope that is true.

Right now my Chapter 13 payments look like they will be $1000/month for 50 months which will pay 100% of my unsecured credit card debt (I don't have any secured debt). I guess the worst that could happen is that if Countrywide goes after me the length of my Chapter 13 plan would be 60 months. Still that is another 10 months in the plan so I hope that doesn't happen.

I've heard that it is more advantageous for lender's to write the defaulted amount off as a loss.

Crossing my fingers. Which makes me think of another question- how long would it be before I would know if the mortgage lender is going to go after me for a deficiency judgement? Common sense tells me it would have to be after the auction, so I guess I have a long time to ponder this :-(