Expert: Norma Duenas - California Bankruptcy Attorney - 9/14/2010

Question
I am getting ready to file a chapter 7 bankruptcy in Indiana.  I have a home with my x husband...our first mtg is 90,000 our Primeequity line of credit is 30,000.  Market Analysis of our property put it at 125,000.  First Mtg is in both our names ...line of credit is only in mine.  He filed bankruptcy 3 years ago and reaffirmed the first mtg.  I do not want to reaffirm the 1st or line of credit but we will continue to make payments on the first mtg for as long as we can as we really don't' want to leave the home yet.  What will happen with the line of credit, will it be relieved in chapter 7 and will they try to foreclose on the house?  Can they sue me or anything?
Also have lease car I want to reaffirm with 10 months left on it but it is a month behind plus late charges overdue..will I be able to reaffirm?  Help really don't know what to do
Thanks

Answer
When you file for Chapter 7 bankruptcy it will not remove your second mortgage from your home. The line of credit will still be a lien on the home which means that they can foreclose on the property if you fail to make the payments and default on the loan. They will not be able to collect against you for the line of credit but they do still have a right to go after the home. Chapter 7 does not allow you to remove the second mortgage from your home. As for the lease, if you wanted to keep your vehicle and make payments on the lease then you would assume the lease. You wouldn't reaffirm a lease. If you are a month behind you can try to work out an agreement with the lease company and still assume the lease agreement.

If you have any further questions you can contact me through:
http://www.socaladvocates.com/long-beach-bankruptcy-attorney