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Would We Be Better Off Now Worrying About Our Second Mortgage? – Justin

“Dear Steve,

I’ve been to my 3rd lawyer about BK. This is the one I used 10 yrs ago for my 1st BK. His fee is $2800 for a chap 7, $1k to retain him. I asked him if it would be better w/chap 13 since than I can get rid of my 1st mortg. as well. He seemed to think that it would be more costly that way and if I stopped paying my 2nd, they wouldn’t foreclose anyway, because in order to do so they would have to pay off the 1st at $160k just to get their $25k. What are your feelings on this and does it make any sense?

Can I ignore my 2nd mortgage when filing chap 7?

Justin”

Dear Justin,

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

Hum, interesting question.

I suppose you could ignore the second to address the current issues. So technically the answer is probably yes.

But I did want to share my gut reaction to this strategy, yuck.

Maybe it is just me, I prefer solutions that address the issue at hand and allow someone to move on afterwards. With this approach it seems like you’d address a lot of your other debt concerns but you’d have this second mortgage, now in default, hanging out there waiting for you. I don’t know about you, but just knowing that liability was out there would leave me wondering when that shoe would drop.

Please update me on your progress by

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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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