Honestly I don't know what I have to do, I am very desperate with my situation, bankruptcy will be the my solution ?

When you file bankruptcy you must continue to pay your secured creditors if you wish to keep the collateral. In other words if you want to keep the house you must be able to continue to make the ongoing mortgage payment. If you cannot afford to make the ongoing mortgage payment then bankruptcy is unlikely to be the answer to your problem. With the limited information in your question it is unclear if a bankruptcy would help you. Contact a local bankruptcy attorney for a free consultation so you can determine if bankruptcy protection would help you.

There are a lot of questions that you have asked and there may be some bankruptcy or non-bankruptcy solutions. There is no way to provide enough information in this "question and answer" format to really explore those options, but I want to give you some ideas. First, in bankruptcy, while you can usually discharge your PERSONAL obligation to pay a 2nd (or any other) mortgage, the Deed of Trust, or lien, against the property remains. So if you file bankruptcy under Chapter 7 (regular bankruptcy) you will no longer owe the creditor money but they can and will foreclose on the house if you don't pay them. This may be the only option is you cannot pay. You don't want to get stuck with liability or tax obligations if the house is foreclosed. Under a different type of bankruptcy, called Chapter 13, you can repay the past-due payments over time, but you still have to make your ongoing future payments. If you can't afford to do this, Chapter 13 may not be a good option. However, if you house is worth less than you owe on the first mortgage, that HELOC may be able to be treated as an unsecured creditor and "stripped off" of your title. You will have to talk to an experienced bankruptcy attorney, hire them to explore this option and provide detailed information to make this determination. Second, depending on whether you received a modification of your first mortgage plus the qualifications, type of loan and other factors related to your second mortgage, there could be a question as to whether you should have received a modification from them. There are some law firms that practice in this area and you should contact them to explore this option. As I said, no concrete answers can be given until you take the time to sit down with an attorney experienced in bankruptcy law and perhaps in mortgage litigation and provide more detailed information. Keep working at it and get some legal help!

It really all depends on your situation. For example, presuming you have two mortgages, in certain circumstances a debtor may be able to wipe out a second mortgage on their home if that second mortgage is no longer backed by any collateral (completely underwater, i.e. after first mortgage is paid off there is no more equity for the second mortgage). Do keep in mind, there are specific requirements that must be met in order to qualify for a chapter 13. A chapter 7 does not offer this advantage. Also, you may not even have to file. Can you refinance? It is probably best for you to consult with a local bankruptcy attorney. There are many reputable ones in your area that would be willing to assist you.