Need help after CH.7

[cgrl2005]

Hey all, anyone with sound advise please. Here's my situation in Cali:

1st mortgage: $379,000
2nd mortgage: $46,000
Present value: $230,000

Chapter 7 was discharged 3 months ago, mortgages were not reaffimed. Trying for a loan mod on the 1st (B of A), but not looking good. If I were to walk-away at this point what are the ramifications, other than the credit hit? Is it possible to just not pay the 2nd since it is so far underwater and not secured? Any and all help to make this decision clearer is greatly appreciated.

[michelle.m]

I am not a lawyer but this was our experience. We were discharged from chapter 7 in May 09. We did not reaffirm our mortgages. My understanding is that we can walk away from our home without paying a penny (we do not want to walk away). The house was included in the bankruptcy so if it does go to foreclosure we would not get another ding on our credit.

[cgrl2005]

Thank you. I was thinking along those lines also, but I was told that it still counts as a foreclosure on your credit. I have tried to get an answer from the lawyer that did our BK and no response from him. I am just wondering now that the BK was discharged and the home is so far underwater that the 2nd is unsecured. So if I stopped paying the 2nd what could their course of action be?

[we're_still_reviewing]

Originally Posted by cgrl2005

Thank you. I was thinking along those lines also, but I was told that it still counts as a foreclosure on your credit. I have tried to get an answer from the lawyer that did our BK and no response from him. I am just wondering now that the BK was discharged and the home is so far underwater that the 2nd is unsecured. So if I stopped paying the 2nd what could their course of action be?

I believe you are protected because you filed Chapter 7.


This might be helpful. The part about 2nd liens is towards the bottom of this page.

Foreclosure Law of California and Related Matters


Good Luck to you.