Legal Question in Bankruptcy in Utah

Bankruptcy and Second Mortgage

I declared Ch. 7 bankruptcy last year. It was discharged in Oct, 2002. Did not include house in bankruptcy. Did not reaffirm either first or second mortgage. Wrote a letter of intent.

I divorced earlier this year, and because of financial issues, thought I had to let the house forclose. Before that happens, is it possible to pay the first mortgage payments, and have the second be put as a lien on title for if the house is sold, they get paid first? Were they technically discharged, therefore cannot report to my credit, and so I can pay the first and get to the second as soon as I can? The second is the only one showing on my credit.

Any help? Or is forclosure the only option? There is no way I can afford both mortgage payments.


Asked on 11/03/03, 7:04 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Bankruptcy and Second Mortgage

If you had an attorney do the bankruptcy, he should be sanctioned for breaking the law. If you did the bankruptcy, you broke the law. One of you should move to reopen the bankruptcy to include the first and second mortgage. Otherwise the house may be sold at foreclosure and you will have to pay the difference between the sales price and the amounts owed - which could be tens of thousands of dollars. If you can save the house, then contact the lenders and see if there is some way they will agree to some sort of schedule to catch up payments. All in all you made a bad mistake by not naming them in the bankruptcy. At your section 341 hearing you swore an oath and promised that you declared all of your debts.

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Answered on 11/03/03, 8:52 pm


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