What to do about a defaulted second mortgage and bankruptcy?
Question Details:
Can a mortgage that is 90 days past due be included in a Chapter 7? The lender says that the borrower does not qualify for a modification and is not able nor willing to modify. Borrowercannot make the past due nor can they afford to pay the current payments as they are. The 2nd mortgage is $77,000; the first is $337,000. They have modified the 1st mortgage and are current. If the 2nd forecloses, either way they get nothing. How should the second be treated?mortgage? Should it be included in the Chapter 7 petition for discharged? It cannot be re-affirmed because its past due.
All debts and all assets must be listed in any bankruptcy case. A failure to do so is grounds for denial of discharge and, in extreme cases, for sanctions and possible jail time.
If you are asking whether or not any deficiency balance owed on the mortgage after sale or other disposition of the property is dischargeable in the bankruptcy case, the answer is yes.
Mark J. Markus, Attorney at Law
http://www.bklaw.com/
