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ccojulun · Joined: 03 Sep 2010 Posts: 2 1.58 Dollars($)

My Chapter 7 bankruptcy was already discharged several months ago. I own and live in a home valued at approx. $700K, with a 1st mortgage of $625K (which I continue to pay every month), and a 2nd mortgage of $200K (which I am also still paying on). The question is: should I still be paying the 2nd/Home Equity Loan ? The Home Equity Loan no longer appears as an "Open Account" on my credit reports.
If I stop paying it, will the bank (BofA) holding the 2nd try to foreclose on my home? And does the 2nd Lien still stay on my home's title?
Blessings to you!

smithsussane · Posted: Fri Sep 03, 2010 9:13 pm Post subject:

Hi ccojulun!

Welcome to forums!

If both the loans have been discharged in your bankruptcy filing and if you haven't reaffirmed the loans, then you're not personally liable for paying anyone of them. You can stop paying both the loans. But as the lender still holds the liens on the property. He can foreclose it to recover the loan. However, he won't be able to come after you for the balance amount.

Feel free to ask if you've further queries.

Sussane

ccojulun · Joined: 03 Sep 2010 Posts: 2 1.58 Dollars($)

Thank you, Sussane, for the information. I reaffirmed the 1st, but not the 2nd in the BK. I am planning to keep paying the 1st mortgage - that is not going to change.

But if I stop paying the 2nd/Home Equity Loan, am I correct in assuming that:
1.) the holder of the 2nd note can NOT foreclose, since the lender holding the 1st mortgage will continue to be paid on the loan every month without fail,
2.) the lien stays attached to the property so if I refinance or sell, the holder of the 2nd will then get paid off.

What other consequences of not paying the loan might I be missing?

Thanks again!

adonis · Posted: Sun Sep 05, 2010 11:00 pm Post subject:

Hi ccojulun,

As far as I can understand the second lien holder will not foreclose the property as the loan has been discharged and you haven't reaffirmed the mortgage. If you don't pay the loan, the lien will remain on the property.

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Does Home Equity Loan get discharged in Chapter 7?