Just spoke to attorney re chapt 7&13

[HOMEBODY]

Just learned that I dont qualify for Chapter 13. I owe more than the allowed for Chapter 13. The attorney said I would have to file for 7 and not reaffirm my mortgage loans and possible walk away from one of them. By not reaffirming, I have the option of continuing to pay the mortgages and keeping them if I want and negotiating a settlement on the 2nd.

Now, I thought that by filing Chapter 7, I would be able to get rid of the 2nd loan on my principal property being that I am upside down on them.

Anyway..so the only benefit I will have is that I will not have the credit cards..which are about $40,000.00 ...the other $9,000 is my car loan.

I do have good credit and would hate to ruin it for nothing. I am able to pay off the cc if I really tighten up my budget.

Would appreciate your advice and ideas as to what I should do...You can read my other threads to see exactly what my financial situation is.

Thanks

[backtoschool]

You cannot strip a second mortgage in a chapter 7. You can only do this in a Chapter 13. But as you have already discovered, Chapter 13 has a debt ceiling.

If you are keeping the house, you would not be able to just strip the second mortgage in a chapter 7. By not reaffirming the mortgages, you can try to negotiate a better rate, etc, but the other party, your attorney and the trustee and bankruptcy judge will have to agree on the terms and they will have to be terms that you can afford under your current financial picture in order to get the court's approval of the reaffirmation.

Being upside down is not a guarantee of anything in a chapter 7 other than you do not have an asset in the home since there is no equity.