Legal Question in Real Estate Law in Indiana

Foreclosing with multiple mortgages

I own a house with a first mortgage and a home equity loan on it. I spent the first couple of months of the year unemployed, and I have fallen behind on my payments. I, therefore, have a couple of questions.

1. If my house is foreclosed on, am I still responsible for either of the mortgages? In other words, if my lender on my first mortgage decided to foreclose, would I still be responsible for paying off the home equity loan?If the lender on my home equity loan attempted to foreclose, would I still be responsible for paying off the first mortgage?

2. If I filed bankruptcy, how much of each of these loans would I still be responsible for paying? Does my payment become reduced? How would bankruptcy affect my debts?

As you can see, I am in a desperate situation. I do not wish to pursue either of these avenues, but I don't see that I have any other choice. I would appreciate anything that you can tell me. Thanks for your help!


Asked on 6/17/02, 11:56 am

1 Answer from Attorneys
John Bator Bator Redman & Shive

Re: Foreclosing with multiple mortgages

Hi

First, if either lender forecloses,they have to name anyone that has an interest in the real estate, including each other. They will then each get a judgement against you-if the sale of the house does not bring enough to pay off both judgements, you are liable for the shortfall-do not let it get that far!

Depending on which chapter of bankruptcy you file, you may not have to repay and can discharge the loans. If you do not wish to remain in the home and file a ch 7 bankruptcy, you would not have to repay any of it and could remain in the house for quite a while before moving. If you are back to work and can resume payment s on both loans, you may be eligible for a ch 13 bankruptcy that would allow you to keep your home and catch up the back payments over 3 to 5 years. I urge you to meet with a qualified bankruptcy attorney asap to review your options-time is of the essence!! Initial consultations are free.

John E Bator

317-685-2426

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Answered on 6/17/02, 12:11 pm


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