How Do I Get Rid Of A Second Mortgage Lien?

Filing for bankruptcy

can eliminate your second mortgage debt. If an appraiser determines the value of your home is less than your first mortgage, or is upside down, Chapter 13 lien stripping may be possible. The bankruptcy court essentially converts your second mortgage into an unsecured debt.

What happens when a second mortgage is written off?

You are still expected to pay it off with one possible exception: bankruptcy. The only thing that changes in a charged-off second mortgage is

the status of the loan

. … Due to there no longer being collateral attached to the loan, the lien on the house is dissolved and it converts to an unsecured debt.

Is there a statute of limitations on second mortgage debt?

Can my second mortgage be forgiven?

Your second lender may voluntarily forgive your second mortgage

, including a home equity line of credit or home equity loan. … Even if your lender lets you off the hook for the second mortgage, you may face an increased tax liability because the IRS treats certain cancelled mortgages as income.

Does a second mortgage ever go away?

If your mortgage is not underwater or your second mortgage is partially secured, and you stop paying your second mortgage, the holder of the second mortgage

will likely

foreclose because it stands to recover all or part of the money it loaned to you from the foreclosure.

Does Chapter 13 get rid of second mortgage?

Chapter 13 Bankruptcy can remove the second mortgage

and even a third mortgage off your home. In a Chapter 13 bankruptcy section 506(a) allows your second mortgage to be stripped off your home and be treated as unsecured debt.

How do you negotiate a 2nd mortgage settlement?

1. Contact the lender to discuss the debt. Begin the settlement process by expressing an interest in paying the debt. …
2. Make an offer. …
3. Remind the lender you know your rights. …
4. Put any agreement in writing.

What happens after 7 years of not paying debt?

Unpaid credit card debt will drop off an individual's credit report

after 7 years, meaning late payments associated with the unpaid debt will no longer affect the person's credit score. … After that, a creditor can still sue, but the case will be thrown out if you indicate that the debt is time-barred.

Can you sell a house with a second mortgage?

A second mortgage

should have little or no effect on a homeowner's ability to

sell her home. While the effects on buyers are nonexistent, sellers must pay off second mortgages just as they must pay off first mortgages.

How long before a mortgage debt is written off?

For most debts, the time limit is

6 years

since you last wrote to them or made a payment. The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

How can I get my mortgage debt forgiven?

1. Begin by contacting your lender to ask about mortgage forgiveness options. …
2. Gather your financial documents. …
3. Write a letter detailing your financial hardship. …
4. Request a letter from your lender that states precisely the terms of your mortgage forgiveness arrangement.

How do I settle my second mortgage after Chapter 7?

1. Contact your second mortgage lender to discuss the debt. …
2. Make an offer to your second mortgage lender. …
3. Remind your second mortgage lender that you know your rights. …
4. Put your agreement in writing.

Are mortgages ever forgiven?

There is no mortgage forgiveness

. Far more common and beneficial to the borrower is a nonjudicial foreclosure. … So long as the lender works within these laws during the foreclosure, no one needs to go to court. The lender sells the home at auction and uses the money to pay off your mortgage.

What happens to a second mortgage when the first forecloses?

Following a first-mortgage foreclosure, all junior liens (including a second mortgage and any junior judgment liens)

are extinguished, and the liens are removed from the property's title

. But the second-mortgage debt and creditor's judgment remain, even though they're no longer attached to the foreclosed property.

Can a debt collector foreclose on a second mortgage?

To collect on debt such as your defaulted second mortgage,

the debt owner can sue you in civil court

. … Because a defaulted debt is often frequently bought and sold, it could be difficult for a debt buyer to prove legal ownership.

Does a second mortgage show up on credit report?

Like most creditors, second mortgage

lenders report late-paying borrowers to the

three major credit bureaus. Each month you're late on your second mortgage's payments creates another derogatory entry on your credit report.