7 years after chapter 7, worried about 2nd foreclosing


LoanSafe Member
Aug 8, 2009
so we filed chapter 7 in 2013 in NC. We did not reaffirm the 1st mortgage (with BoA, now with NewRez/LoanCare) but we have continued to pay the mortgage as "agreed upon" and never been more than 30 days behind since (it is due on the 1st and we pay about the third week of the month). We did not reaffirm the 2nd which was with BB&T and included it in the bk and have not made a payment since 2013. I tried to contact them after the bankruptcy but everywhere I called could not pull up the account number at all.or pull up anything on our address or name.

Our county says the current "real estate assessed value" is $261,000. Zillow and Redfin say it is worth $300,000 or more. We owe $127,000 on the 1st. We owed aprox $39,000 to BB&T on the 2nd in 2013. So we are concerned that now that our value has gone up and our 1st is down to $127,000 that the 2nd may try to foreclose on us. I would not think Chapter 13 is an option because we have too much equity in the home. A title search shows a deed of trust for the 1st and a deed of trust to BB&T on the 2nd.

1. If they sold the debt to a third party collector would they have had to transfer the deed of trust to the collector as well? If no, then if we pay a settlement amount to a third party, how can they release the lien and the deed of trust?
2. If a third party collector contacts us, how can they prove to us that if we pay a "settlement amount" that it will actually release the lien and deed of trust?
3. If we contact BB&T to negotiate a lump sum payment to release the lien, what do we do if they say we don't know anything about the loan, we have no record of it and if that if we made a payment they have no way to apply the payment (that is what they told us years ago)? Would that release us from having to pay the 2nd to BB&T? and is there a way to request they release the lien on the deed of trust if they can't take payments or a settlement payment?
4. I would not think refinancing is an option because we are still 3 years from the bk coming off. We are also self employed and income is low and sporadic.
5. Given what we owe and possible value of the house . . what can I realistically expect to pay (2%, 5%,10%,15%) for a settlement lump sum to BB&T if they still have it or to a third party collector if it has been sold?

I'm just trying to be proactive and make sure that we aren't sitting here one day all innocent like and certified mail arrives telling us we have lost the house. Please. . . any advice is much appreciated.


LoanSafe Member
Jun 20, 2017
Here's my two cents being in a similiar situation after Chapter 7 in Michigan in 2011.

1. Since your county records continue to show BBT as the lien holder, it is probably accurate. In my case, the second mortgage was sold to a debt collector. They can not collect on the debt but can attempt to enforce the lien which means foreclosure or simply not releasing the lien until they are paid.

2. Ask for verification that they hold the lien.

3. Have BBT put it in writing that they do not have any record of this debt or lien. Tell them your county records indicate they do have the lien. DO NOT talk about a settlement at this point! First you want verification that they hold the lien.

4. You wont be able to refinance without a release of the lien.

5. Dont expect any settlement less than 50% these days. In 2009-2012, it was possible to get 10%, but not now.

My advice is to lay low and only communicate in writing and save everything. It's very unlikely that a second lien holder will foreclose because they also have to pay off the first mortgage. Unlikely, but not unheard of if there is a lot of equity.
Stay current on the first and you probably wont hear from the second until you sell or refinance.
This has been my strategy since 2011 and I hear from the second lien holder once or twice a year. I offer 10% settlement and never hear back from them. Im in no hurry to sell or refinace but I know eventually I will have to pay or settle to get the lien released. By that time, it could of been sold to someone else.