Bankruptcy Second Mortgage. Any Ideas?
Q: I have a home that has a first and second mortgage. The first was recorded with county registar and the second was not. If i go to sell this home will the second be discovered on the home. Last part of this is the fact that I declared bankruptcy and declared the second mortgage as part of the bankruptcy. I just wish to get out from under this debt.
A: Between you and the second mortgage holder the loan may still be secured despite the bankruptcy and despite having not been recorded unless you or the bankruptcy trustee took special action during the bankruptcy. A buyer probably won't know about the second mortgage. But if you listed it as a secured debt on your bankruptcy and he looks at your bankruptcy he might find it. It depends on who is doing the discovering and whether or not they are capable of "discovering" a mortgage which is not registered with your county. suppose I am not the only reader who wonders whether the first mortgage was also declared, and if not, why wasn't it? My understanding is that all debts are supposed to be declared, which would mean that BOTH mortgages have to be listed on your bankruptcy filing. But maybe I am wrong! I am also wondering why you can't simply sell the house and use the proceeds to pay off your debts, inlcuding both mortgages. And I wonder whether you are filing Chapter 7 or Chapter 11.