Legal Question in Bankruptcy in Virginia

should 2nd mortgage be discharged

We were discharged from ch.7 in Nov 08. We have a 1st mortgage (260K) and 2nd (134K). House value is $40 -50K less than what we owe. We didn't reaffirm either mortgage. Payments on both have always been current. Our intent was and is to keep home. Both mort. companies were listed on sched. D as to keep. On discharge paper from court both mort. companies were listed as receiving notice of discharge. One credit bureau has 1st listed as( includ. in BK;) 2nd listed as current. How should it read? Are we liable for defiecency? If we refinance for what the home is worth, will the 2nd release lien if they don't get full payment?


Asked on 3/18/09, 9:16 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: should 2nd mortgage be discharged

Both are discharged. Technically, the 2nd should be reported as included in BK, but you may be better off with it showing current. You would not be liable for a deficiency in the event of foreclosure. The 2nd is not required to release the lien if you refi or sell for what the home is worth: they are entitled to full payment to release the lien.

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Answered on 3/18/09, 10:39 am


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