Bankruptcy can help a debtor eliminate his obligation to pay his debts. When a second mortgage is discharged through bankruptcy, a debtor is no longer required by law to repay the outstanding balance. Creditors are not allowed to pursue debtors to collect any longer for debts that are discharged. Bankruptcy is usually used as a last resort by people faced with too much debt. The rules that govern bankruptcy depend on what kind of bankruptcy is filed.
A chapter 7 discharge is obtained through filing a Chapter 7 bankruptcy. Once the discharge is approved, the debtor no longer has the obligation to pay for the discharged debts, however, not all debts can necessarily be discharged. Creditors are ordered not to collect debts from debtors whose debts have been discharged and harassing collection calls should cease. However, not all debts and individuals are eligible to file a Chapter 7 bankruptcy.
As of now, you cannot use chapter 7 to get rid of your second mortgage. But, you can get a discharge from unsecured second mortgages in chapter 13. First of all, creditors do not like the idea of dealing with foreclosures. Most of the time, lenders can provide you with help to avoid your home from getting foreclosed.
Some debts can be discharged, while some cannot. Understand that debts that are secured by property cannot usually be discharged. However, when you owe more than the value of your home, the lien can be discharged since the creditor has nothing more to claim.
Before filing for bankruptcy, make sure to research on the type of bankruptcy you plan to file. The discharge procedures that will apply will depend on the type of bankruptcy. There are certain factors that may prevent you from getting a successful discharge such as willful and malicious damage to property.
The best way to get answers is to ask a bankruptcy lawyer for options. Before you decide to file bankruptcy under Chapter 7 or Chapter 13, you need to know whether you are eligible or not. Professional help can ensure that you get the best options available.
We recently filed and discharged Chapter 7 bankruptcy, which included a line of credit, which was secured by our mortgage. They never contested this debt and the debt was discharged with our other debts. This week we received a notice from the bank that financed this debt that states they will begin foreclosure proceedings if we do not pay $5,000 by 8/15/11 and then begin re-payment on this loan.
How is this possible if the debt was filed and was never contested and discharged through our bankruptcy proceedings along with our other debts? We understand now regarding the lien process and secured loans, but don’t understand how the Bankruptcy Court processed the debt and discharged it and why the bank who holds this debt never once contested it during the bankruptcy proceedings? If you could help us or send us in the direction of where we can find someone who can, we would greatly appreciate it. Thank you!
K Johnson(Quote) (Reply)
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I have a delicate issues with BOA former Countrywide. Issues I belive to be misleading under predatory practices from the orginal lender who used flase advertising to attract customers and sell off Mortages. Reproted to many Gov. angencies incld. the OCC under an appeal. When asked to produce the note as to owns the house now… no response. My guess it is a Wallstreet backed security. Issues are debt-to-income, forgery on a financial note/ Calf. penal code 470 sec. a-d. An attempt of entrapment to sway me into the sub-prime market but failed, along with false advertising bait and switch and colabertaing for dishonest profit in business practies. Much more. I have retianed and paid in full to a bankrupcy attorney in Milwaukee,Wisconsin. No action as of this time. If need to I will go to the Federal Bureau of Investigation and under the 6th amendment I have the right for a Jury trial. This can be avoided if a meadator would chose to assit and help.
L.J.B.(Quote) (Reply)
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