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.
- 1 Can a second mortgage be discharged?
- 2 How long does a second mortgage stay on your credit report?
- 3 How do I settle my second mortgage after Chapter 7?
- 4 How do you negotiate a 2nd mortgage settlement?
- 5 Why you should never pay a collection agency?
- 6 Does a second mortgage hurt your credit?
- 7 What happens after 7 years of not paying debt?
- 8 Can a second mortgage foreclose before the first?
- 9 What is a second mortgage called?
- 10 Can I refinance my mortgage if I did not reaffirm?
- 11 What happens if you default on your second mortgage?
- 12 Do banks negotiate mortgage payoff?
- 13 What happens if a second mortgage forecloses?
- 14 Is it better to pay collections in full or settle?
- 15 How do I get a collection removed?
- 16 What should you not say to debt collectors?
Can a second mortgage be discharged?
When Does My Second Mortgage Go Away? The second mortgage (or other junior lien) you strip is treated as a nonpriority unsecured debt when you file your bankruptcy. … However, the second mortgage lien will not be removed from your house until you complete your plan and get a discharge.
How long does a second mortgage stay on your credit report?
If the previous account is a positive account, meaning there were no late payments, it will remain on your credit report for up to 10 years from the date it was paid and closed. If there are late payments on the account, it will be removed seven years from the original delinquency date.
How do I settle my second mortgage after Chapter 7?
- Contact your second mortgage lender to discuss the debt.
- Make an offer to your second mortgage lender.
- Remind your second mortgage lender that you know your rights.
- Put your agreement in writing.
How do you negotiate a 2nd mortgage settlement?
- Contact the lender to discuss the debt. Begin the settlement process by expressing an interest in paying the debt.
- Make an offer.
- Remind the lender you know your rights.
- Put any agreement in writing.
Why you should never pay a collection agency?
On the other hand, paying an outstanding loan to a debt collection agency can hurt your credit score. … Any action on your credit report can negatively impact your credit score – even paying back loans. If you have an outstanding loan that’s a year or two old, it’s better for your credit report to avoid paying it.
Does a second mortgage hurt your credit?
Closing costs for second mortgages can be as much as 3% to 6% of your loan balance. … And if you need a second mortgage to pay off existing debt, that extra loan could hurt your credit score and you could be stuck making payments to your lenders for years.
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 a second mortgage foreclose before the first?
Right to Foreclosure The second lender can foreclose at any time after the borrower has defaulted on the second mortgage loan. The second mortgage lender does not need to wait for the first mortgage lender to foreclose.
What is a second mortgage called?
A second mortgage or junior-lien is a loan you take out using your house as collateral while you still have another loan secured by your house. Home equity loans and home equity lines of credit (HELOCs) are common examples of second mortgages. … By taking out a second mortgage, you are adding to your overall debt burden.
Can I refinance my mortgage if I did not reaffirm?
First of all, there is no legal reason at all why you can’t refinance a loan that was not reaffirmed. … A reaffirmation agreement effectively takes the loan out of your bankruptcy discharge. Without an agreement the loan is discharged but the lien remains against the property.
What happens if you default on your second mortgage?
Remember, the second mortgage is secured on your home just like the original mortgage, so if you default on your second mortgage – even if you’re up-to-date on your first mortgage – then your lender can start foreclosure proceedings to take your home.
Do banks negotiate mortgage payoff?
You can always try and negotiate a lower payoff amount with the bank but it is very unlikely they will reduce the amount owed. By law the bank has to accept a full payoff (called Redemption) on or before the period of redemption expires as set…
What happens if a second mortgage forecloses?
So, if the second-mortgage holder foreclosed, the foreclosure sale proceeds wouldn’t be sufficient to pay anything to that lender. … That’s because all the money from the foreclosure sale would go to the senior lender. But the second-mortgage lender could still sue you personally for repayment of the loan.
Is it better to pay collections in full or settle?
It is always better to pay off your debt in full if possible. While settling an account won’t damage your credit as much as not paying at all, a status of “settled” on your credit report is still considered negative.
How do I get a collection removed?
Typically, the only way to remove a collection account from your credit reports is by disputing it. But if the collection is legitimate, even if it’s paid, it’ll likely only be removed once the credit bureaus are required to do so by law. There are 3 collection accounts on my credit reports.
What should you not say to debt collectors?
- Additional Phone Numbers (other than what they already have)
- Email Addresses.
- Mailing Address (unless you intend on coming to a payment agreement)
- Employer or Past Employers.
- Family Information (ex.
- Bank Account Information.
- Credit Card Number.
- Social Security Number.