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 need to speak to an attorney regarding how California laws affect your Bankruptcy exemptions. EVERY STATE IS DIFFERENT PEOPLE. I hate when people answer these questions as if they know it all...it really bugs me!

Anyway, Bankruptcy is Federal laws, however states set exemption amounts. For example.. the State Of Ohio allows $5,000 equity in a residential home per owner (so if husband and wife then your allowed $10,000), so if your second mortgage "ate" up your exemption amount (your upside down) then you could file what is called an Adversay Complaint in the Bankruptcy Court asking that the second mortgage be discharged with the rest of your debt because its taking away from your legal exemption (talk to an attorney regarding this). You would probably want to spend the $300 -$400 to hire a real estate appraiser to get an accurate value of your home to determine what bankruptcy chapter to file and how much equity or negative equity you have in your home.

As far as the boat goes...why would you want to keep it if your over your upside down that much? The boat loan company could always counter offer you and lower what you owe throughout the bankruptcy and you can re-affirm that debt. I personally would only re-affirm a debt like that if they lowered the amount you owe to what the boat is worth.

When you are discharged from bankruptcy, you will re-gain your credit rather quickly because creditors know you can't re-file a chapter 7 for 6 years, so basically your screwed if you run your credit up again.

In closing...find an attorney who specializes in bankruptcy law..someone who KNOWS what they are doing, if not you can screw yourself in the bankruptcy court to the point you can't re-file if its not done right the first couple times....Good luck!

Answer 2

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 3

Hi, I believe that when you file for bankruptcy, all your personal property will force sale by the bank. This is done so they can recover as much money as possible from you. I am not sure how does it goes in your country.. but here in Singapore, you are going to have a difficult time getting the next loan. Thank you and regards.

Answer 4

Neither boats nor houses are exempt from bankruptcy laws. The lenders' liens on both issues supercede bankruptcy laws.

You can expect repossession of the boat, foreclosure on both mortgages, and a pretty crappy FICO score when you are through with this process.

Answer 5

Dear friend
I think you should update yourself with the proper and exact information for your issue. I would recommend you to go through the following website to get the correct and brief information. Thanks

http://www.usalegalcare.com/Bankruptcy.htm
Good luck