Posted on: 24th Feb, 2010 11:14 am
I have started the process of chapter 7. At this time we have a 80/20 mortg. w/2 different lenders. I am currently behind on both 1 mo. I applied for the loan modification but was told by Bank of America that I have to wait 45 days before finding out if approved. I can't afford the combined payments on the mortgages (even w/filing chpt. 7) enless a loan modification is done. I need to file bk asap because I have credit cards suing us for payment. I am not sure what to do about the house. I want to hold onto it if at all possible but don't want to be charged with a bunch of debt if I don't let it go in the bankruptcy & can't get the loan mod. #1 do i have to reaffirm both mortgs. if I want to keep them? #2 what if I don't reaffirm? Does not reaffirming mean that I can continue to make payments if I want but if not then I am not held accountable for the debt? And that I wouldn't have to pay taxes on the forgiven amt if it went to foreclosure? How does a foreclosure affect the 2nd mortg?
Once you file bankruptcy, the lender will stop the process of loan modification for you. You won't be able to reapply for modification unless your bankruptcy filing is discharged. If you file Chapter 13, you will be able to strip off your second lien however, you will get a repayment plan to pay off your first mortgage.
If you file Chapter 7 and reaffirm your mortgages, you would become responsible for paying them off. If you do not reaffirm, then you can surrender the property and the lender would foreclose it to recover the dues. You won't be liable for any deficient amount resulting from the sale.
If you file Chapter 7 and reaffirm your mortgages, you would become responsible for paying them off. If you do not reaffirm, then you can surrender the property and the lender would foreclose it to recover the dues. You won't be liable for any deficient amount resulting from the sale.