Eliminate a Second Mortgage Even After a Chapter 7

A new California ruling - In re Rosa - has made it easier for debtors who received a discharge in a Chapter 7 bankruptcy case to strip off their second mortgage lien in a subsequent Chapter 13 case. If you filed a Chapter 7 bankruptcy and still have a second mortgage lien on your property, you may now be able to get rid of the second mortgage. Our Los Angeles bankruptcy attorneys at Wadhwani & Shanfeld can help you find out if you are eligible for a lien strip under this new ruling.

In re Rosa

'In re Rosa' is a recent ruling from the Northern District of California that now makes it easier for people to eliminate a second mortgage following a Chapter 7 bankruptcy. More specifically, it is possible to eliminate a second mortgage in a Chapter 13 proceeding that immediately follows a Chapter 7 discharge. If the second mortgage is not secured by any value, the lien can be stripped away without paying anything to the second mortgage lender. Before this case, that was not possible. 'In re Rosa' is a breakthrough case for many people who filed Chapter 7 bankruptcies and were misled to believe that their second mortgage would go away when their Chapter 7 cases were discharged.

Now, under In re Rosa, debtors who file a Chapter 7 may still have the opportunity to eliminate a second mortgage by filing a Chapter 13 bankruptcy after a Chapter 7. The ruling makes the following possible:

  • When a consumer files a Chapter 7 bankruptcy
  • Receives a discharge
  • Files a Chapter 13 bankruptcy; and
  • Values their home/property to deem a second mortgage lien unsecured;
  • Then the lien can be removed at the end of the Chapter 13 case.

Our legal team understands that the process may seem confusing, but we are prepared to discuss your case personally with you and explain how we can guide you through the process. For a FREE case review, contact Wadhwani & Shanfeld today.

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