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My Chase Bank Second Mortgage Was Discharged in My Bankruptcy and Charged Off

“Dear Steve,

Current on my first, discharged both 1st and 2nd mortgage in chapter 7, Chase charged off my 2nd,

I have the money to pay Chase and bing my loan out of default. Since they charged off my loan they will not cure the default. I received a letter on 3/1/13 saying I had 35 days to cure. My 35 days are up tomorrow. I want to keep the home and I am afraid they will foreclose since there is enough equity in the home so that both notes would be paid in full.

I did include both mortgages in my Chapter 7 and did not reaffirm the loans however I want to keep my home. Is there anything I can do since I have the letter saying I had 35 days.

Please help

Brian”

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The Answer

My Chase Bank Second Mortgage Was Discharged in My Bankruptcy and Charged Off

Dear Brian,

So here is the problem as I see it. Since the mortgages were discharged Chase can go ahead and sell off the note on the second mortgage. I don’t see first mortgage companies doing this I guess because they get the house and can resell it.

The issue here is not if Chase can go after you for the loan balance, since it was discharged in your bankruptcy, but that you don’t have a clean title to the property until both of those mortgages are paid off.

Unless you have a lot of equity in the house now it is unlikely the second mortgage owner would force the foreclosure on the house and have to pay off the first mortgage.

If you did not reaffirm the loans then the lenders are free to do whatever they want following the discharge if you don’t pay.

But at this time I would suggest you either sell the home and pay off the loans and try to save some of your equity or wait to hear from the new owner of the Chase second mortgage and either try to settle that debt with them or come to an alternative arrangement.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

My Chase Bank Second Mortgage Was Discharged in My Bankruptcy and Charged Off
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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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