Charged Off 2nd Mortgage

[thomasj]

Does anyone know if your in BK Ch 13 and the Second Mortgage gets charged off by Citi Bank west does it turn into un-secured debt? I have read a few didferent blogs and web sites that say it does.
Can you also tell me if I change my CH 13 to keep the house does that fall into that i will have to repay them back? Just a question because it was charged of durning my BK.

[HHM]

Let's back-up

1. What is the disposition of the house. Are you surrendering it in BK?
2. Has your chapter 13 plan been confirmed by the court?

The charge off, itself, has no legal significance vis-a-vis the debt. All that means is that Citi has decided to write the loan as a loss for accounting purposes, but 2nd mortgage remains fully collectible and I would imagine the lien is still on file. Thus, if you "change" your BK back to keeping the house, you will have to cure ALL arrears (on both the 1st and 2nd) as part of your chapter 13 plan.

You may have the option to do a lien strip of the 2nd, but that requires that there be absolutetly no equity in the house that covers the 2nd mortgage, not even one dollar...the home must be worth less than the amount owed on the 1st mortgage to lien strip the 2nd mortgage in your chapter 13.

[thomasj]

Let's back-up

1. What is the disposition of the house. Are you surrendering it in BK?
2. Has your chapter 13 plan been confirmed by the court?

The charge off, itself, has no legal significance vis-a-vis the debt. All that means is that Citi has decided to write the loan as a loss for accounting purposes, but 2nd mortgage remains fully collectible and I would imagine the lien is still on file. Thus, if you "change" your BK back to keeping the house, you will have to cure ALL arrears (on both the 1st and 2nd) as part of your chapter 13 plan.

You may have the option to do a lien strip of the 2nd, but that requires that there be absolutetly no equity in the house that covers the 2nd mortgage, not even one dollar...the home must be worth less than the amount owed on the 1st mortgage to lien strip the 2nd mortgage in your chapter 13.

I wish i would have found this forum earlier....Dam

Yes I am surrendering it in the Ch 13. The reason for the surrender is cause the is no equity at all. I live in Sunny San Diego where the house market crashed! I bought a condo for 450K and now they are worth 270k...If i change my mind and do this I will be able to keep my house and my atty will have to redo all the paper work she might just get mad.. but i will not have to move in with the parents..

My 341 meeting is dated Friday March 21 9:00am. I got an email from my attorney and she filed already a ch 13 on Monday. im hope for a payment around $480.00. I have had some income issues durning this process and am hoping to get them to look at my income again cause I make about 1000.00 + less with out my shiftDif and overtime a month.

I was just wondering if it is true that your second becomes un-secured debt after it is charged off? I have come to terms there is no beating the system and coming out on top. Thanks for all your information but time to man up...

[2confused]

I'm with you. I too am in sunny san diego and there is no equity in our home. My attorney has us in a chapter 7 (still nervous about this due to little confidence in our attorney) I just recently realized that we can possibly write off the second if we were in a 13. Aready had 341, perhaps it's too late. I wonder if the writing off of the 2nd can still occur even if it's not your original loan. IWe refied a couple of times it too late...don't know what to do.

[2confused]

Someone said you can lien strip a second in a seven, is this true and if so,for an equity line? and after the 341?

[HHM]

Someone said you can lien strip a second in a seven, is this true and if so,for an equity line? and after the 341?

You can't.

[2confused]

Is it in someone's best interest to file a 13 or 7, if they owe 8o,ooo in cc and 2nd is 13o,ooo plus house is 150,ooo under ? HOuse's 1st is on an interest only and will double in two years. And, is it too late to change mind after 341. And, if decide to let house go but statement of intent was to keep it, does this need to be amended?