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Please help us get ACCURATE info on ch 7 debt!

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    #1

    Please help us get ACCURATE info on ch 7 debt!

    We are new to this forum and have not filed for bk of any sort yet. We live in Ca and were told two different things by two different attnys. First said we could strip away second mortg. if primary mortg. was upside down. Said 2nd becomes unsecured if first mortg. is upside down. It is by apprx.40k.

    Next attny said we could not keep house and strip away 2nd. Said if you keep one loan must keep other regardless of value in first mortg. Anyone out there know anything about situation for bker's in ca on a chapt 7? Please help!!! Thanks
    Last edited by Law50; 12-12-2009, 03:53 PM. Reason: Change wording
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    #2
    Opinions are like lawyers "belly-buttons" (you all know the right phrase), they are all different. I would suggest for about `17 bucks you download Nolo Press C 7 book. It is in PDF format. It is very good. Hard copies are expensive.

    nolopress.com

    It will make you know what the lawyer attempt to tell you, but in real English. 'Hub
    If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

    Comment

      #3
      In a 7 there is no process to strip a 2nd lien of a house. That is for 13's where the 2nd might get partial payment during the 13 payback process.

      In a 7 while it's true that if you simply don't pay on the 2nd it's not likly they will do anything to you, untill the value of the house goes up, or you pay down the balance on the 1st enough to make the 2nd have something to grab on to.

      However the lien will live on after a 7. You only option is to make a deal with the 2nd after BK to have them remove the lien. As long as the lien lives then thier right to take the house lives on. What they do about it differs from every lender and the market value involved.
      3/2/09- Filed: chapter 7 / No asset
      4/1/09- 341 Hearing: 1 creditor showed up Got to love family feuds
      4/2/09- Trustee Report of No Distribution Filed
      6/24/09- Discharged and case closed

      Comment

        #4
        A big thank you

        Thank you for taking the time to reply. This is a gut wrenching decision whether to file or spend the next 5+ yrs. trying to consolidate and rebuild. Appreciate your time...

        Comment

          #5
          DebtEnder provides good information about how it works in a Chapter 7 and a Chapter 13. I believe you talked to two attorneys of which one was talking about a Chatper 7, and the other a Chapter 13.
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog

          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

          Comment

            #6
            Well, in the 9th circuit (where CA is located), striping and cramming of 2nd mortgages is dead. The Bankruptcy Appellate Panel ruled that out years ago.

            The general rule is "no striping of second mortgages" in chapter 7 BK. However, there are a minority of cases where this has been done.

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