lein stripping

[nathan005]

I don't believe it becomes unsecured because of a charge off. The Bank still holds a lien on the property, and that's the key to the whole thing.

Now if the creditor files a notice of satisfaction (with the appropriate recorder of deeds) along with the charge-off, then that's different.

So the lien would still be on the property, but since the 2nd charged off and dismissed in BK chpt 7 they wouldn't be able to collect anything until the house is sold in the future. Would that be correct?

[justbroke]

So the lien would still be on the property, but since the 2nd charged off and dismissed in BK chpt 7 they wouldn't be able to collect anything until the house is sold in the future. Would that be correct?

I'm not positive, but they may actually be able to foreclose on the property after discharge and close. The reason is... they have a valid lien and liens survive bankruptcy unless they are avoided. In any event, with the market and crazy conditions out there, I don't know of any Bank in a 2nd position (junior lien), that's going to foreclose on a discharged debt.

I don't know what the Foreclosure Protection Act of 2008 does with any of this.