Q: I got a letter from my second mortgage saying I need to make a ballon payment soon. No way I can afford it or even close
My credit is shot so don't think I can refinance. some one suggested to file bankruptcy. As I red up on bankruptcy it said u can't include second mortgages in bankruptcy. Is that true?? Is there a way around it? What else can I do if I can get a loan to refinance or anything?
A: You can absolutely include second mortgages in bankruptcy. Contact an experienced bankruptcy lawyer for a consultation and review of your total financial situation.
A:
Bankruptcy Chapter 13, enacted back in 1978, quickly became known as the "save the house" route.
An arrearage in a first mortgage debt can be cured, *at no accrual of interest*, in a Ch. 13. More relevantly, a second mortgage debt can be similarly treated. And if it can be shown that there is no equity in the house to which the second lien can attach, the second mortgage lien can be removed and treated as an unsecured, i.e., dischargeable claim.
I strongly agree with my KY colleague that you should confer with an experienced bankruptcy attorney in your state, sharing your full financial circumstances and income, to determine the best way forward.
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