I consulted w/ a paralegal earlier today and she told me i don't qualify to file either chapter 7 nor 13 because the bk court only counts 1st mortgage and not the 2nd. My situation is my 2nd mtg (400k) is bigger than my 1st mtg (280k). My property value is around $550k according to Zillow. I need to file chapter 7 to get rid of my judgements and liens from credit card debts yet I don't qualify. What can I do ? Please advise if there is any truth to this.
Don't listen to the legal advice of a non-lawyer who is engaging in the unauthorized practice of law. Rather, seek the advice of a competent, experienced bankruptcy attorney in your area who will explain all of your options which should include a bankruptcy filing.
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Mitchell Reed SussmanLitigation LawyerPalm Springs, CA ·
Get the advice of an experienced BK atty. If I can take your question literally, there is no truth to the statement " the BK court only counts 1st mortgage"
A paralegal cannot legally give you legal advice. You need to be very careful what advice you seek. Such activity is illegal in most states and can be reported to the supreme court or bar.
It is impossible to give good advice based on the sparse information you have provided. There are some circumstances when neither a Chapter 7 or a Chapter 13 is available. This usually happens because your income is too high to file a Chapter 7 as a consumer debtor, but your secured and unsecured debts are too high for a Chapter 13. However, simply having a second mortgage which is larger than the first is not such a situation.
If you were actually in a situation where you couldn't file a Chapter 7 or a Chapter 13, the remaining option would be a Chapter 11 filing. A Chapter 11 filing is significantly more complicated and expensive than a Chapter 13 filing.
You should speak with a knowlegable attorney to determine what the options are for your specific situation and be very careful about advice given by untrained or unlicensed individuals.
Two possibilities: The paralegal, who is practicing law illegally without a license, was wrong or you misunderstood what she said. Both mortgages are liens on the property which makes the debt for the mortgages secured. Therefore, as I am sure you know too well, you have no equity in the property. You are under water/upside down. Your house will make no difference in your Chapter 7 case if you otherwise qualify. I have a feeling that the paralegal was talking about the ability to get rid of the second mortgage by doing a strip off in a Chapter 13 and did not explain things properly. When you go for a legal consultation make sure you talk to the lawyer. It is illegal to give legal advice unless you are a lawyer. Telling a person that he or she is or is not eligible to file bankruptcy under a particular Chapter or that the person should or should not file bankruptcy, when, how, where, etc. requires a legal opinion and only a lawyer can do that legally. The reason for that is that otherwise you would get incorrect information from anybody out there who claims to be a paralegal or whatever other title the person might wish to use to misrepresent his or her position.
