Can A Second Mortgage Be Discharged In A Chapter ?
When a person files for bankruptcy some amount of debts can be resolved and the liability for it is discharged by the court. If a person has filed for bankruptcy under Chapter 7, then their assets may be liquidized to disburse the most important debts. In a Chapter 13, the assets are produced and the court works out a plan for discharging the debts. |
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If you have gone to a second mortgage on your property or home loan, then the bankruptcy case would still be treating as a mortgage. If you wish to keep the house, you first of all need to plan the kind of bankruptcy you are planning to file.
When you list all your debts in the bankruptcy case even the second mortgage needs to be listed. The court will review your earnings and also the outstanding amount on the second mortgage. Based on your expenses and the income earned the court will make a plan to disburse the debts off. However, through any Chapter it is not completely possible to discharge the second mortgage unless you have agreed to foreclose the property. Even then the mortgage company will be allowed to keep the title of the property and transfer it only when the debt is paid completely.
It all depends on the circumstances as to how much of your second mortgage can be discharged. If there is very little amount left on your property, then the court will save the property and also discharge the second mortgage.
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