Legal Question in Bankruptcy in Maryland
We're filling Bankruptcy (Chapter 7). We are keeping our home and our 1st and 2nd Mortgage are current. We were told by our attorney that our 2nd Mortgage would be reduced to reflect the current value of our home, stating an appraisal would be needed. Now the Attorney says there is nothing we can do about reducing the 2nd Mortgage. Is this correct, is there no way to reduce the 2nd Mortgage?
Thanks for your help
2 Answers from Attorneys
You cannot get rid of a second mortgage in a chapter 7 case. If you want to eliminate a second mortgage you need to file a chapter 13.
What Laura Margulies said. Note also that even in a 13, you generally can't reduce the 2nd - it's all or nothing, depending on whether there is any value over and above the amount of the first. If there is any equity supporting the second, you can't strip it in a 13 either (assuming the mortgage loan is secured only by the principal residence).
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