Discharged from Chp 7...things have changed and want to know if we can keep house?

[sowren]

Hi..Discharged Ch 7 in March. (We are still paying 500 a month to the Trustee for next 7 months to keep a vehicle)...anyway, now we are thinking about keeping our house. Question - we have a first and a second...does anyone know if we have to work with both banks or has the second gone away in the Ch 7? Hope I am making sense?

Thanks to anyone who can help with advice.

[debee]

The liens pass through bankruptcy unaffected so while the debt has been discharged, both lenders still have liens.

[sowren]

Thank you very much for responding - that makes sense. Guess it is probably best not to try to keep it then. Purchased home for $440K in 07, 1st lien $133,000 - 2nd $120,000 - House is currently worth approx $190-$200K max. Can't give these things away where I live. I am sure there would be interest and penalties as well.

Well, that settles that - doesn't it?

Thanks again...I truly appreciate your help.

Susan

[debee]

Hi Susan.

If your local area is that hard hit, the house might be worth even less. If you have any friends or friends-of-friends in real estate, you might ask if someone is willing to run the comps and come back to you with a figure just to be sure.

With the house value that you have now, there is so much equity available for the 2nd it is highly unlikely that they would accept a settlement offer. Doesn't mean you couldn't offer one but it might be akin to buying a lotto ticket. But if the house is worth substantially less than you think, then you may have other options. There have been forum members whose seconds were totally unsecured and/or barely secured who paid 5-10% of the loan in order to release the lien. In your case, sounds like a long shot but I mention it just in case you're wrong on the current market value.

Other options include stop paying now and save what would have gone into the mortgages while waiting for them to foreclose. There are members here who got over a year of savings this way.

Welcome to the forum.

[oregonpilot]

Hi susan....ditto to what debee said.

Also...welcome from a fellow oregonian.