Expert: Terry Leeders - 8/3/2007

Question
I have two mortgages on my house, the first is in both my name and my girlfriends name and the second is in my name alone for purposes of buying a business.  The business has failed and I am now working, however I am unable to make both mortgage payments.  My credit problems alone allow me to file for chapter 7 bankruptcy and my question is this:  Can I discharge the second mortgage along with all my other credit problems and keep the first which is in both our names thus keeping the house?  My income- Gross $48,500/yr, 1st mort-$115K, 2nd mort-$120K.  My debt alone without adding the first mortgage is around $300K.

Answer
Unfortunately, the 2nd mortgage is a lien on the home, and that will remain a lien against the property, so you would have to keep paying on that to keep the home.
Therefore, a chapter 7 would only get rid of unsecured debt, a chapter 13 can consolidate debt, to help you get current on mortgages, and pay back as low as 10% of your unsecured, depending on your budget.  Therefore, Shawn, I recommend you talk with a bankruptcy lawyer to set you on the right course of action.