2nd mortgage and filling bankruptcy

[themagicone]

Hi! I filled Chapter 7 seven years ago January. But about year and half ago I lost a house I bought to foreclosure. The first loan was paid in full from the auction sale but the 2nd loan got nothing. I have a balance of around $60,000 on it. They put it as "charged off" on my credit but they ding me with a late payment every month. Currently it states I owe $20,000 and I'm 120+ days late for the last year. I can't get credit anywhere because of it, my credit score is 680-700 but no body will touch it. Besides that debit, I have about $1,000 in credit card debit. I'm considering filling bankruptcy to clear the 2nd mortgage in January 2011. Or should I wait the 6-7 years for the statue of limitation on collection to run out and try to get it removed? I know with bankruptcy I can get credit and loans again within a year. I'm just looking for peoples opinion on filling just on the 2nd mortgage and if it will be worth it. Thanks.

[aljohnson007]

The SOL time starts with your last payment on the loan. In most States, it is 3-4 years so check out where you are currently.

[themagicone]

Well according to my credit it states it will be removed on 12/2013 so 4 years from this December. Bankruptcy sounds better than not getting no credit at all for the next 4 years, the next year will be hard enough till I file. I need to refi my car due to being unemployed and not one bank will make me a loan on it because of the $20,000 due on the second mortgage.

[aljohnson007]

Someone correct me if I'm wrong but I don't think your CR has any connection with the SOL. What State are you filing in?

[IBroke]

Someone correct me if I'm wrong but I don't think your CR has any connection with the SOL.

No, you are correct - it hasn't.

[themagicone]

Minnesota. The SOL is 6 years since last payment, last payment was 12/2006. But I'm not sure how the whole charge-off change in 6/2009 and the foreclosure changes the SOL start date.

[themagicone]

Minnesota - SOL is 6 years is what I've been told. Last payment was 12/2006. But they didn't change it to charge-off status till 6/2009. And I'm not sure how that effects the SOL date or foreclosure on the first does. If I wait till 12/2012 what is stopping them from suing me 1 day before the end of limitations.

[2manybills]

The SOL time starts with your last payment on the loan. In most States, it is 3-4 years so check out where you are currently.

That's correct. Whatever the last payment was acknowledges the debt again.

[themagicone]

So my last payment was 12/2006. Meaning the last day they can collect is 12/2012. Until then they are going to ding me $600/month more on to the $20,000 they say I am past due as it is. That is another $22,500 or so. And it won't be removed from my credit until a year later. Bankruptcy to remove it seems better and better.

[IBroke]

So my last payment was 12/2006. Meaning the last day they can collect is 12/2012. Until then they are going to ding me $600/month more on to the $20,000 they say I am past due as it is. That is another $22,500 or so. And it won't be removed from my credit until a year later. Bankruptcy to remove it seems better and better.

To remove the debt - of course but not necessarily to remove it from your report.

Here's the deal: BK doesn't remove any tradelines from your credit-report - or to be exact, there's no legal requirement to take them off. You certainly have better chances to remove certain tradelines from a report after BK, but the creditors don't have to. They simply have to report the tradeline as "IIB (included in bankruptcy) - $0 balance" but your payment-history and missed payments might and often will still be on for up to 7 1/2 years after the date of first delinquency (DOFD).

[themagicone]

I know they will still be there as "IIB" but they won't say $42,000 past due will they?

[IBroke]

I know they will still be there as "IIB" but they won't say $42,000 past due will they?

No, they will show a balance of $0.

And as I said - chances are you might be able to get it off your report completely after BK. Many lenders take their accounts off the report after you have filed.

Now, almost ANY account has a little "error" on file (wrong default-dates, wrong category etc.). After being discharged, you can use that against them. After discharge, you wait 30-60 days. Many accounts will fall off automatically. You dispute the remaining negative accounts. Again, a high number won't respond because its a waste of time. Now, the accounts that are verified with little errors:

Send a CMRRR (certified mail with the green card) to them and request removal from account or you will sue. again, some will comply because after losing money due to your BK, they certainly don't want to pay YOU!