2nd Mortgage & Bankruptcy?

Question

if i file for bankruptcy, (not sure if it'll be a 7 or a 13, probably a 13) and live in california... can i include my second mortgage? i owe about 370k on the 1st and @ 100k on the second. i'm also wondering, if i have a boat i'm making payments on, will that have to go back to the bank even if i don't want it to? if it matters, i owe more on it than it's worth by @ 3-6k... pay off is @ 16k.

Answer 1

You are required to list all debts in your bankruptcy schedules. If you want to keep your house, you will need to reaffirm all mortgages and continue making payments (if you file Chapter 13, this may be done through a Chapter 13 plan). Otherwise, the bank can seek relief from the automatic stay and foreclose.

Also, any good attorney will tell you to surrender the boat. One, it's not a necessity. Two, you owe significantly more than what it is worth. Again, if you want to keep it, you will have to continue making payments.

My advice to you - if you are serious, talk to an attorney. You can also find a lot of good resources at:

Answer 2

Bankruptcy laws recently changed in some really major ways. Even attorneys that don't regularly practice Bankruptcy don't know much about the new rules. Odds are against you getting a reliable answer here.

I don't know about keeping that boat that's worth less than you owe. Bankruptcy is supposed to give you a fresh start, not set you up to fail again, and if you want to keep a non-performing asset that isn't worth the liability, you just don't understand your situation well enough to bother trying to fix it.