Short sale of our prim home after closure of ch 7, 1st reaffirmed, not 2nd

[karma]

We filed Ch 7 bankruptcy. We have been discharged awaiting closing. In the petition, we chose to keep our primary home. We have a first and a HELOC on the home. We reaffirmed the first. We did NOT reaffirm the 2nd. Our income has not been what we thought it would be, and we are feeling trapped in our home. We have not been late on any payments to either bank. We are thinking of doing a short sale. If we sold today, we would get enough to cover the 1st, and about 1/2 of the second. My questions are, can we do this, would the 2nd bank be able to file a deficiency against us, and would it cause any issue with the fact that we chose to keep it on our ch 7 petition?

[AngelinaCatHub]

If you did not reaffirm, you are free to pay the bills if you wish. If you sell your property, the house is 100% yours the day you purchased it, it only has a lien on it for the two mortgages. You can pay off the first and what you can on the second. The second cannot come against you as it would technically be discharged. I would not hold back on any monies you get as you would be selling your property but with an interest of lien and they have a right to that money. It could end up in an AP and a reopen of your case. 'Hub

[karma]

Who would initiate the AP, the bank or the trustee? Would that be because the bank would feel they deserve some of the asset distribution that was already given out, or would the trustee feel that now since we would not have such a high mortgage now, we could convert to chapter 13? I guess I probably need to talk to a bk lawyer, but I am just wondering what the chances are of either doing an AP, for how long after closing the case could actually be reopened with an AP? Is it forever? If so, I can never sell my house, due to the fact someone will try to reopen our bk case?

[UpsideDownMI]

Your 2nd would still have to approve the short sale as they still have a lien. This could cause you problems with your 1st (since you reaffirmed) if the 2nd does not approve.