Determining Whether You Owe on a 2nd Mortgage Post-Bankruptcy
Was your home equity loan reaffirmed during your bankruptcy? Have you been making payments towards the debt religiously ever since your discharge without being sure if they are being applied or not? Do you actually owe the debt or was it included in your bankruptcy discharge? These are huge questions that sometimes get asked WAY too late in the game.
Some bankruptcy petitioners only find out that a home equity loan or 2nd mortgage was not reaffirmed during their bankruptcy until years later. How is this possible? Sometimes the bankruptcy process can seem like a whirlwind of information. Some bankruptcy petitioners have so many creditors to list and discuss and hear about that they all start to sound the same after a while. Still others are going through other major life events around the same time as their bankruptcy and too much is on their mind for them to keep track of all the details.
How do you know if you reaffirmed your home equity loan during bankruptcy?
If you pull your own credit report (which you should be doing regularly to keep tabs on accounts and potential fraud) and there is no indication of the 2nd mortgage, you probably didn’t reaffirm during bankruptcy.
Keep in mind that the 2nd does not go away if you do not reaffirm. There is still a lien on the house. Failure to reaffirm just means that you are not liable for the debt if you lose the property in a foreclosure, but it is still a valid and enforceable lien on the property.
If the home equity line (or 2nd mortgage) was active when the bankruptcy was filed and you received a discharge of debt, it was included and you are no longer liable for the debt. Sadly, if you’ve been paying them for years since the bankruptcy, there’s nothing to be done about that except wish that you had looked into the matter sooner.
For additional helpful information, hints and tips about southern California bankruptcy, please get in touch with the experienced bankruptcy attorneys at Westgate Law. We have the knowledge and the experience to guide you through the bankruptcy process smoothly.