A Chapter 13 bankruptcy filing can get rid of a second mortgage if the balance of the first mortgage is greater than your home’s value. So can a Chapter 7 filing, in some places.
You’re having trouble paying the mortgage, especially for a home that has fallen in value, but you can’t think about moving because you have children, or just because it’s your home. I get that.
Chapter 13 gets rid of a second or third mortgage that is entirely underwater - that has no home value for its lien. My colleagues have posted before on this opportunity, this right you have from Congress for your much-needed fresh start. But Chapter 13 requires a three to five year repayment plan, based on what’s left over from your income after reasonable living expenses.
Chapter 7 is the bankruptcy type which has no repayments. Courts are split about a right to get rid of an unsecured mortgage in Chapter 7. The most recent case is out of the Eastern District of New York, and it rules that there is no difference between the two chapters on this issue. You can get rid of an unsecured mortgage without a repayment plan.
I’m Jed Berliner, and I do everything possible for your fresh start  - including mortgage litigation.
