Legal Question in Bankruptcy in Indiana

2nd Mortgages or Equity loans

Can a 2nd mortgage or equity loan be included in a bankruptcy? The 2nd mortgage was figured thru a company that loans up to 125% of the value of the home. The funds were used primarily to pay off credit card debt. The house was never appraised during the 2nd mortgage loan process.


Asked on 3/28/02, 10:05 pm

1 Answer from Attorneys
Dorene Philpot Philpot Law Office

Re: 2nd Mortgages or Equity loans

No. A second mortgage or equity loan is considered a secured loan.

If you want to get it discharged, you can give up the house. Otherwise, you will need to reaffirm that loan.

That's why refinancing those credit card debts was not the wisest thing you've ever done.

If they were still credit card debts (which were unsecured), you would have no problem getting them discharged, but now that they're in the form of a secured debt, the only way to get rid of them is to also get rid of the house.

I suspect that that's not what you wanted to hear. Sorry.

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Answered on 3/29/02, 4:54 am


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