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My Wife Filed Bankruptcy and Included Mortgage and Home Equity Loan. – Stan

“Dear Steve,

My wife filed for Chapter 7 Bankruptcy. I have a 1st mortgage and a home equity loan from the same bank. Both are showing as discharged on my credit report since neither were reaffirmed.

What happens if we stop paying the 2nd? Do we have to pay it off or will their be a lien attached to the property when it comes time to sell?

And recently we tried to re-finance through HARP on the 1st but were turned down because the bank is saying we need to reaffirm the mortgage.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

What are my options? We want to keep the property and get a better rate and offer a cash payoff of 10% on the loan of the 2nd if we have to.

Stan”

Dear Stan,

Whose name was the mortgage and home equity loan in? Both, yours or hers?

A bankruptcy will kill the mortgage but not the lien against the property.

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

Damon Day - Pro Debt Coach

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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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