Posted on: 30th Jul, 2007 02:36 pm
we have 2 mortgages. the 1st mortgage (balance $314k) is in arrears by 3 payments under a payment plan arrangement. the second mortgage (balance $78k) is behind by one payment. the 1st mortgage just had an interest increase based on an adjustable arm and the payment will increase by $800.00 each month. this is too much for us to handle. we attempted to refinance but we found out that the value of the home (aprox $350k) is less than the 2 mortgages by aprox $40k. no one will refiance us in this situation. if we go into foreclosure what happens to the two mortgages if a sale occurs and the value is not enough to pay off the mortgages? if they sell the house there may be enough to pay off the 1st mortgage but not the second. will we be responsible on a personal basis to pay off the 2nd mortgage if this occurs. or will it just default and a lien or judgement be accessed against us on a personal basis?
"If we go into foreclosure what happens to the two mortgages if a sale occurs and the value is not enough to pay off the mortgages? If they sell the house there may be enough to pay off the 1st mortgage but not the second. Will we be responsible on a personal basis to pay off the 2nd mortgage if this occurs. Or will it just default and a lien or judgement be accessed against us on a personal basis?"
Brenda, the second mortgage holder can get a judgment against you for recovery of his mortgage balance if foreclosure sale does not result in recovery of his dues.
Brenda, the second mortgage holder can get a judgment against you for recovery of his mortgage balance if foreclosure sale does not result in recovery of his dues.
If we file bankrupcy will that prevent the judgement against us.
Hello Liebrenda,
The second mortgage lender may record a judgment against you. But a lien cannot be placed against the property when it has already gone for foreclosure.
On your non-payment of the second loan for a longer period, there are chances that the lender may declare a charge-off against you. It means that the creditor would write-off or forgives your unpaid loan amount. But for the charge off, you may have to pay the required tax against it. And it will also have a negative affect on your credit report.
The second mortgage lender may record a judgment against you. But a lien cannot be placed against the property when it has already gone for foreclosure.
On your non-payment of the second loan for a longer period, there are chances that the lender may declare a charge-off against you. It means that the creditor would write-off or forgives your unpaid loan amount. But for the charge off, you may have to pay the required tax against it. And it will also have a negative affect on your credit report.
Hi Brenda,
Are you asking to file bankcruptcy prior to foreclosure? Please specify.
Are you asking to file bankcruptcy prior to foreclosure? Please specify.
Hi Brenda,
When you are charged with a judgment you should pay it within 30 days (it can vary state wise). On non-payment, the lender may take the following steps to accomplish the judgment amount:
a) Lender may take away your personal property or other assets.
b) He may file a lien against your real property (inapplicable in your case).
c) He can even garnish your wage or income for executing the judgment.
Now if you file for bankruptcy during the collection process, all further collection will stop until you get a discharge from bankruptcy court. In this case, the lender should contact the trustee to decide if the debt will be paid or discharged by the court.
When you are charged with a judgment you should pay it within 30 days (it can vary state wise). On non-payment, the lender may take the following steps to accomplish the judgment amount:
a) Lender may take away your personal property or other assets.
b) He may file a lien against your real property (inapplicable in your case).
c) He can even garnish your wage or income for executing the judgment.
Now if you file for bankruptcy during the collection process, all further collection will stop until you get a discharge from bankruptcy court. In this case, the lender should contact the trustee to decide if the debt will be paid or discharged by the court.
Yes, if we file bankruptcy prior to foreclosure, will this avoid any judgements applied against us.
if you file bankruptcy foreclosure on your home will stop. if you are opting for chapter 13 bankruptcy then a payment plan will be set and according to that you will have to make the payments.
my first was written off but the second is after their money..should i file
chapter seven before judgement or wait till after judgement
chapter seven before judgement or wait till after judgement
hi sonny,
you can file chapter 7 bankruptcy before the judgment. in case of chapter 7, most of your debts will be discharged. however, you can reaffirm the mortgage and pay off the dues of the lender. this would have a positive effect on your credit report.
thanks
you can file chapter 7 bankruptcy before the judgment. in case of chapter 7, most of your debts will be discharged. however, you can reaffirm the mortgage and pay off the dues of the lender. this would have a positive effect on your credit report.
thanks
Is there a provision in the Obama stimulus that lets you not have to pay taxes on a short sale or foreclosure.
Can you file for bankruptcy if your mortgage has a lien placed against it.
Hi Kelley,
There already exists an act through which you can save on taxes paid for the deficient amount forgiven by the lender in short sale or foreclosure. This is known as Mortgage Forgiveness Debt Relief Act.
Hi Guest,
I think you can still file bankruptcy. But a bankruptcy is not going to wipe off the lien. You still have to pay it off to remove it from the property.
Thanks,
Jerry
There already exists an act through which you can save on taxes paid for the deficient amount forgiven by the lender in short sale or foreclosure. This is known as Mortgage Forgiveness Debt Relief Act.
Hi Guest,
I think you can still file bankruptcy. But a bankruptcy is not going to wipe off the lien. You still have to pay it off to remove it from the property.
Thanks,
Jerry
i lost my house to forclosure last year. the house was sold for less than the value we had mortgage on it. i had two mortgages on the house from the same bank. i received a letter from a collection company stating that i owe $90,000.00 and asking me pay the balance. i am writing to see if there is a legal way that the loan can be forgiven or written off. thank you for your help.
Hi
If the loan has been charged off by your original lender to the collection agency, they have the right to collect the balance money from you. They might not forgive the entire money, but you can negotiate with them and convince them to accept less than what you owe. But before you do that make sure you send them a debt validation letter. This is done to check whether the collection agency actually has a valid right to collect the money from you. If they fail to provide you with proper validation documents within a 30 days period, you'll no longer be liable to pay the debt as per the Fair Debt Collection Practices Act. To know more on debt validation and how to write the validation letter, you can refer to the page mentioned below:
http://www.creditmagic.org/repair/sampleletter-debtvalidation.html
If the loan has been charged off by your original lender to the collection agency, they have the right to collect the balance money from you. They might not forgive the entire money, but you can negotiate with them and convince them to accept less than what you owe. But before you do that make sure you send them a debt validation letter. This is done to check whether the collection agency actually has a valid right to collect the money from you. If they fail to provide you with proper validation documents within a 30 days period, you'll no longer be liable to pay the debt as per the Fair Debt Collection Practices Act. To know more on debt validation and how to write the validation letter, you can refer to the page mentioned below:
http://www.creditmagic.org/repair/sampleletter-debtvalidation.html
i have a similar situation, 2 mortgages that went into forclosure. the first wrote off the debt and i own nothing, but i just got a letter from a collection agency requesting the 60,000.
i recently lost my job, so i'm surviving on unemployement benefits. my only asset is my car, which is worth about $5,000, but i owe $2,000 on it. i'm trying to figure out what the best course of action would be. i will not be able to repay that money that is owed to the bank. should i file for bankruptcy? do i need to get a lawyer to help me fight against this debt? what type of lawyer is best? is there a way to get out of the debt without filing bankruptcy or ruining my credit any more than it already is?
i recently lost my job, so i'm surviving on unemployement benefits. my only asset is my car, which is worth about $5,000, but i owe $2,000 on it. i'm trying to figure out what the best course of action would be. i will not be able to repay that money that is owed to the bank. should i file for bankruptcy? do i need to get a lawyer to help me fight against this debt? what type of lawyer is best? is there a way to get out of the debt without filing bankruptcy or ruining my credit any more than it already is?