What happens to the second loan debt that was not paid during the bankruptcy? 8 Answers as of June 08, 2015

The debt is a second loan on a mortgage and was included in the list of debtors on the bankruptcy and we've been paying the first loan mortgage regularly and on-time, and we received this withdrawal of POC "without prejudice". What happens if we want to refinance our house or sell it? Do we owe the second loan amount to Chase Mortgage? Will it have to be repaid? We're within a couple months of the bankruptcy being over with no more payments needed. Our bankruptcy lawyer is not responding to our questions. I've found limited information on the "without prejudice" language and we're concerned about having to repay this amount once the bankruptcy is over.

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Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
There is not enough information here to be able to answer your questions. Did you do a motion to value the 2nd mortgage as unsecured (sometimes referred to as a lien strip) at the beginning of your chapter 13 case? Was the payment on the 2nd mortgage included in your budget but you just did not make it? If the lien was stripped through your chapter 13 case then, once you obtain your discharge, the lien will be void and you should (if everything was done correctly) own your home free of that 2nd lien. If the lien was NOT stripped through your chapter 13 case because the property was worth too much for that to happen, then the lien will remain intact and secured by the property. While your personal obligation to pay the 2nd mortgage loan may be discharged (depending upon how the loan was treated in your plan), the lien against the property remains and will have to be satisfied at some point before you can refinance or sell. If your lawyer is non-responsive then it might be time to visit his office in person.
Answer Applies to: Colorado
Replied: 6/8/2015
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Unless this lien was "stripped" in the chapter 13 case, you do owe it. I have seem some of these withdrawn and forgiven by the lender but that does not sound like what is going on here. It is not too late to strip the second. First, was the first mortgage more that the value of the property when you filed the case? If so, you qualify. You will have to get an appraisal as of the date of the filing of the bankruptcy. I suggest you have another lawyer look at your case.
Answer Applies to: California
Replied: 6/8/2015
Stephens Gourley & Bywater | David A. Stephens
If your chapter 13 did not strip off the second mortgage it will remain as a lien against the home which would need to be paid upon sale. If it has been stripped then it is gone as a lien against the home.
Answer Applies to: Nevada
Replied: 6/8/2015
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
It is difficult (if not impossible) to answer your question completely without having complete information. The best advice I can give you is to meet with an experienced BK lawyer to review your BK file with you, and discuss options. Based on what I am reading here, it does not appear that you stripped off the 2nd mortgage, but only a review of the BK court file will answer that question. Most attorneys charge their normally hourly rate for these kinds of consultations.
Answer Applies to: Colorado
Replied: 6/8/2015
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
First things first: SIT ON YOUR LAWYER. He should answer your questions promptly. If you have been in a Chapter 13, and there is no equity at all underlying the second mortgage, you should still be able to have it determined to be an unsecured claim, subject to discharge like any other unsecured claim. 'Without prejudice' means that the claim which is withdrawn or dismissed may be brought again. I can only speculate as to why the creditor (do sure to distinguish 'debtors' from 'creditors' it makes all the difference) withdrew the claim, but your lawyer should be able to figure it out. It is not likely a good thing for you. Good Luck.
Answer Applies to: Wisconsin
Replied: 6/8/2015
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Unless you obtained a lienstripping order in a Chapter 13 bankruptcy, the second mortgage lien is still valid and must be paid on sale. And even if you did get a lienstripping order, this order is only effective after you obtain your Chapter 13 discharge. Oh and BTW, you probably filed a list of your CREDITORS in your bankruptcy, since YOU are the debtor.
    Answer Applies to: Nevada
    Replied: 6/8/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If he did not avoid the 2nd mortgage then yes you will have to pay it.
    Answer Applies to: New York
    Replied: 6/8/2015
    Ronald K. Nims LLC | Ronald K. Nims
    "Without prejudice" simply means the lender reserved the right to file another POC. However since you're near the end of a Chapter 13 the deadline for filing another POC passed years ago. I don't have all the facts from your case, but it sounds like the second mortgage was unsecured and your attorney had their lien avoided. That means, you don't have to pay the second mortgage.
    Answer Applies to: Ohio
    Replied: 6/8/2015
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