Chapter 7 - Negative Equity
I have 3 mortgages on my property (1st $144K, 2nd $19K, and 3rd $20K). The appraiser says the property is probably worth about half the value of the first mortgage. My income has been cut in half, so I am looking at filing Chapter 7 bankruptcy. I'm not behind or even late on the first mortgage.
Can the bankruptcy judge reduce my first mortgage to the appraised value and relieve me of the unsecured portion of the 1st mortgage? Would the lender then have to rewrite the mortgage to the appraised amount?
Where would I find the bankruptcy law that covers negative equity? I would like to keep my house, if possible.
When I list my debts, should I list both the mortgage company that originated my loan along with the servicer that it was sold to?
1 Answer from Attorneys
Re: Chapter 7 - Negative Equity
With wholly unsecured trust deeds you may want to examine Chapter 13 as an option. Could strip the junior liens potentially.
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