BK13, giving up house, and lien strip on 2nd

[elster]

Giving up house. House is worth less than balance on 1st.

Does 2nd become unsecured debt? Thought this only the case if I remain in the house as my principal residence.

Or does 2nd always become unsecured debt no matter if I stay in house or not? (my principal residence is now a rental property).

[justbroke]

Giving up house. House is worth less than balance on 1st.

Does 2nd become unsecured debt? Thought this only the case if I remain in the house as my principal residence.

Or does 2nd always become unsecured debt no matter if I stay in house or not? (my principal residence is now a rental property).

The 2nd doesn't become unsecured debt unless you strip it off. So, most lawyers will include a provision in the Plan which states that the first and second mortgages are "surrendered and fully satisfied".

However, in many States, it's possible for the lender to come after you, after the sale, for the deficiency and charge that as an unsecured claim.

In Florida, I can surrender property in full satisfaction of the claim. The lender would have to attempt to seek some deficiency, but in many cases, there isn't a whole lot of money in a Chapter 13 to be had.

[elster]

I am hoping I can surrender home in satisfaction of the 1st and 2nd, and not have to deal with paying the 2nd in 13. I am hoping to just pay CC debt at 100% in a 13.

If 2nd becomes unsecured debt, They will take all of my disposable income and I'll be worried about being poor for 5 years.

Hope I can do that, surrender without the lien strip. I just want to give up the house in satisfaction of the 1st/2nd. Hope it works out.