Legal Question in Bankruptcy in California
bankruptcy 13 or 7
we are about to do a ch 13 and put our 2nd and 3 rd in it and be stuck with payments to a trusty for 5 years. we are current on our 1st and just got modified. can they foreclose on a 2nd and 3rd if we don't make payments and do the ch7 to have it all a clean cut deal.?
2 Answers from Attorneys
Re: bankruptcy 13 or 7
A chapter 13 repayment plan with a lien stripping motion is the only way to remove the 2nd and 3rd mortgage. In a Chapter 7, the liens would survive and the lenders could still foreclose if you did not make the payments.
Lien stripping in a Chapter 13 is very complex and procedures vary by district. You need a qualified attorney to help you.
Re: bankruptcy 13 or 7
If you decide to keep the house and you are behind on your mortgage with respect to 2nd and 3rd Trust Deed, you would need chapter 13.
Under chapter 13, you may or may not be able to strip 2nd and 3rd mortgage, provided the loan exceeds the current market value of the house.
If you are not paying 2nd and 3rd, if trust deed holder wish, they could exercise their right to forclose. However, you could come up with a minimum payment plan as per your income and budget, and cure and or strip 2nd or 3rd or both depending upon the current market value, provided you complete your plan.
Here at Kalra Law firm, we are experienced chapter 13 lawyers for over 20 years and will be able to assist with your bankruptcy/debt consolidation. Thank you in advance for considering our firm for your legal needs.
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