Posted on: 21st Mar, 2012 05:43 am
i filed bankrupty 7 in 2010. my home is now going to foreclosure. i am thinking of just handing in my deed in lieu of foreclosure. i have a second on my home which was included in my bankruptcy 7. will that second be forgiven if i hand in my deed in lieu of foreclosure or will i still owe on that second. may bankruptcy 7 was approved in 2010. my house debt was included in that bankrupty. i need to know will i still owe on the second mortgage if i hand in my deed or will that debt be foregiven also or will i still owe on that second? could you please help me.
Is the deed in lieu for the second mortgage? In most states, using deed of trust for the mortgage, will not have the deficeincy judgement allowed to be pursued. If you look at your loan docs, and see any clause for deficeincy, you may be liable for it. In most states, turning in the DIL, will avoid any further legal action to reclaim the collateral. Also, in most states, purchase money, whether first or second mortgage, lenders can only take back the collateral. On refinances, there are different rules. Check your states laws on mortgages and deficeincies, and then go through your loan docs. Good luck
Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily.
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