Legal Question in Bankruptcy in Pennsylvania

Filing the wrong bankruptcy, Chapter 7

January 2001 my husband and I filed a Chapter 7 bankrupcty through an attorney, due to credit card debt and utility bills. We kept our house. We have two mortgages on our home each in the amount of $40,000 ($80,000). Our current monthly mortgage payments total $1,000 ($500 each). When we filed the Chapter 7, our mortgages were current and remaining bills were discharged in the bankruptcy. Nine months later, we are still still struggling to pay the monthly mortgage payments. Our house is only worth $30,000-35,000, because the neighborhood has deteriorated. What are our options? If we walk away from the house/mortgage payments and get an apartment, we have a judgment against us forever, yes? Can we file or refile another bankruptcy? We no longer want the house or debt.


Asked on 10/08/01, 2:19 pm

1 Answer from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: Filing the wrong bankruptcy, Chapter 7

If you did not enter into any reaffirmation agreements on those loans in your CH. 7 case, then you were discharged from the non-recourse loans (generally the junior trust deeds). The purchase money mortgages are usually limited to recovery against the property, so if they foreclosed, that would satisfy their debts and the junior liens could not recover against you personally. Worst case scenario is you could file a CH. 13 to deal with residual debts.

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Answered on 11/21/01, 3:42 pm


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