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,

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

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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

15 thoughts on “Would We Be Better Off Now Worrying About Our Second Mortgage? – Justin”

  1. Steve, It feels like a huge load was lifted, but I still have money problems. Dental bills for kids never go away, medical also, makes me wonder how I ever survived before.
    The terms didn’t change with the mortgage, I just feel like I’ve been through enough and if Chase sold off the mortgage, then they can provide all the info to the new one and leave me out of it. What are they going to do, deny me my mortgage because they don’t have all the info? It feels insulting to me that they even asked since they took it from me.
    Hopefully the economy will get better some day and the nation will have fewer people asking you questions about extreme debt problems. Thanks for all your input and helpful direction Steve. Talk soon 🙂

    Reply
  2. Hey Steve, Just a bit of an update. I went with the Chap 13 lawyer, filed and have it set up for $150 a mo for 3 yrs. The 2nd mortgage was wiped off, and I keep the house. The interesting thing is, Chase held my 1st mortgage, and they sent it off to another company (which is also a collection company) to take care of, like selling the mortgage off. I know companies do this all the time, but I was making my payments to Chase all along, and nothing was supposed to change with the BK. The new company expects me to send them proof of home insurance, and sign some tax documents to make sure everything goes through. I don’t think I need to do anything, since I didn’t decide to go with another mortgage company. Any thoughts on this?

    Reply
    • Justin,

      Well first off, congratulations. It’s been a long journey to this point but now that you’ve filed, how do you feel?

      Chase may have sold your mortgage to another company. It does happen. The request for proof of home insurance does not seem unreasonable but I have no idea what other documents they are requesting. It seems like if you call Chase to confirm this new company is not the entity servicing your account that should clear up the mystery. From what you’ve said it sounds like they have not changed the terms at all just who is handling it.

      Steve

      Reply

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