Question: Can You Discharge A Second Mortgage In Chapter 7?

How do I get rid of a second mortgage lien?

Through a lien strip, the bankruptcy court essentially takes your second mortgage (which is a secured debt where the lender can foreclose on your property if you miss your payments) and converts it to an unsecured debt (just like a credit card debt) by ordering the lender to remove its lien from the property..

What happens if you default on a 2nd mortgage?

When you fall behind in payments on the second mortgage, the second-mortgage holder will probably initiate a foreclosure because it will recover part or all of the money it loaned to you once the property is sold at a foreclosure sale.

Can second loan foreclosure on property?

Yes, a second mortgage holder can foreclose, even if you are current on your first mortgage. Just like any type of loan, if you are behind on your payments, the lender has the legal right to take whatever property was offered as collateral on the loan.

Can I sell my house if I did not reaffirm?

Yes, you can sell the home. The effect of no reaffirmation is that you do not have a personal obligation to pay the mortgage. You still are the titled owner and the mortgage is still a lien on the property so it must be paid in order to sell the property.

What is the statute of limitations on a second mortgage?

The second mortgage statute of limitations varies by state. Typically, it lasts between three and six years in most states, though a few states have a longer time period. If you get to the point of foreclosure, your first mortgage will go away, because the lender will take possession of your home.

Is it better to get a second mortgage or home equity loan?

In a debt payment plan, it is important to put a second mortgage or a home equity line in with the rest of your consumer debt. It should be paid off before you start investing seriously because the interest rates on these types of loans are generally higher than those for most first mortgages.

Can a 2nd mortgage be refinanced?

Yes, you can refinance a second mortgage. Assuming you have good credit and your mortgage payments have been consistent, you should be able to refinance your second mortgage without a problem. The process is the same as getting any other mortgage, so just make sure you review all offers and choose the best one for you.

What happens if you foreclose on a second mortgage?

If there is not enough equity in the home to pay off the first mortgage, the second mortgage holder gets nothing in the foreclosure sale. When a second mortgage holder initiates the foreclosure process, it is responsible for paying off the first mortgage holder’s balance due.

How do I get a Judgement lien removed from my house?

There are several ways to remove a lien from your property, including:Paying off the debt. If you pay off the underlying debt, the creditor will agree to release the judgment lien. … Asking the court to remove the judgment lien. … Filing for bankruptcy.

Can I refinance my mortgage if I did not reaffirm?

If the only issue is that you did not reaffirm the home loan in your bankruptcy, you will be able to refinance your loan with a different lender. Your lawyer was not remiss in advising you not to try to reaffirm the mortgage.

Does a second mortgage hurt your credit?

In addition to the higher mortgage rates, there are additional fees that you’ll owe if you want a second mortgage. … And if you need a second mortgage to pay off existing debt, that extra loan could hurt your credit score and you could be stuck making payments to your lenders for years.

Can a second mortgage be discharged?

Lien stripping is a process that allows bankruptcy debtors to strip off (eliminate) wholly unsecured junior liens (such as second mortgages, home equity loans, and HELOCs) from their homes. In most cases, you can only get rid of your second mortgage or other junior lien if you file for Chapter 13 bankruptcy.

How do I settle my second mortgage after Chapter 7?

Answer: A common strategy for dealing with post chapter 7 bankruptcy 2nd mortgages is to approach the 2nd mortgage with a settlement offer in exchange for the 2nd mortgage lender removing the lien.

What happens to the first mortgage when the second forecloses?

Following a first-mortgage foreclosure, all junior liens (including a second mortgage and any junior judgment liens) are extinguished and the liens are removed from the property title. But the second-mortgage debt and creditor’s judgment remain, even though they’re no longer attached to the foreclosed property.

Can a second mortgage foreclose before the first?

A second-mortgage holder can initiate foreclosure proceedings even if the first mortgage is not behind on payments. The second-mortgage lender must still take all the necessary steps in the foreclosure process, and must also notify the first lender of the intention to foreclose on the property.

What is the difference between a 2nd mortgage and a home equity loan?

A second mortgage is another loan taken against a property that is already mortgaged. … A second loan, or mortgage, against your house will either be a home equity loan, which is a lump-sum loan with a fixed term and rate, or a HELOC, which features variable rates and continuing access to funds.