My husband and I filed a chapter 7 bankruptcy 2 years ago and now we are trying to refinance our home. We have a 1st and a 2nd lien (mortgage) on our home. There is no problem with the 1st as we reaffirmed it in our ch7, however our attorney did not get the paper in on time to reaffirm the 2nd so now the mortgage company shows it as discharged. It also shows as a 0 balance and discharged on our credit report. We contacted the mortgage company and they said if we do not pay it they will forclose on our home. I have been making the payment on time every month. I thought that discharged means you do not repay the debt? Do we owe this or not? What is the next step? We need to get this cleared up in order to refinance.

Thanks

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Originally Posted by dyates

My husband and I filed a chapter 7 bankruptcy 2 years ago and now we are trying to refinance our home. We have a 1st and a 2nd lein (mortgage) on our home. There is no problem with the 1st as we reaffirmed it in our ch7, however our attorney did not get the paper in on time to reaffirm the 2nd so now the mortgage company shows it as discharged. It also shows as a 0 balance and discharged on our credit report. We contacted the mortgage company and they said if we do not pay it they will forclose on our home. I have been making the payment on time every month. I thought that discharged means you do not repay the debt? Do we owe this or not? What is the next step? We need to get this cleared up in order to refinance.

Thanks

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It is possible you still owe. Contact the attorney who did the paper work and ask him. The second mortgage company will have to get the first mortgage compnay to agree to the foreclosure. 2nd is a leaker position.

mr.yet

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Originally Posted by mr.yet

It is possible you still owe. Contact the attorney who did the paper work and ask him. The second mortgage company will have to get the first mortgage compnay to agree to the foreclosure. 2nd is a leaker position.

mr.yet

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Mortages are secured credit. Any arrears to a mortgage is not dischargeable in bankrupty. Once the bankruptcy is discharge, the leinholder can still come after you for the arrears, and yes, foreclose on the property.

Mortgages are NOT dischargeable in bankruptcy as well as child support arrears, taxes, judgements, and fines and resitution regarding a criminal offense.

You will have to pay your mortgage company the arrears.

dyates writes: "I have been making the payment on time every month. I thought that discharged means you do not repay the debt? Do we owe this or not? What is the next step? We need to get this cleared up in order to refinance."
The debt has been discharged and the mortgagee cannot 'make' you pay; however, the lien has not been discharged and the mortgagee can foreclose the lien. But, you have to be in default, so do not miss a payment. You need to ask the mortgagee for the payoff; and do your own amortization schedule to check their answer.