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  1. #11
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Second Mortgage Settlement

    Quote Quoting socialyankee
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    I just offered them 5% cash and they came back and said no.
    But didn't counteroffer because 5% is chump change and doesn't even open negotiations. The lender has nothing to lose by waiting until you either bid against yourself or want to sell or refinance.

    Quote Quoting socialyankee
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    I could probably give 20% cash at the most but I'd be pushing it.
    Probably should have offered that.

  2. #12
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Second Mortgage Settlement

    What they will take would largely depend on whether their lien reflects any equity in the property. If the property isn't worth much more than the first mortgage, they probably are more inclined to deal. If the property is worth more than the sum of the two mortgages, then why should they accept anything just because the owner wants to sell. He should sell and let the secured creditors be paid off. This is their right from the contracts he made with them and the bankruptcy proceedings.

  3. #13
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Second Mortgage Settlement

    Quote Quoting flyingron
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    There's no taxability issue right now (and likely back then the filer was insolvent).
    When the loan is discharged in bankruptcy the amount discharged is not included in income because of the bankruptcy exception in IRC 108. Thus it doesn't matter whether he was insolvent or not. However, there is still the potential issue of having to adjust other tax items to account for the fact that the discharged debt is excluded from income.

  4. #14
    Join Date
    Feb 2014
    Posts
    20

    Default Re: Second Mortgage Settlement

    House is maybe worth 210 215k and mortgages together equal 260k roughly.

  5. #15
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Second Mortgage Settlement

    Quote Quoting adjusterjack
    View Post
    But didn't counteroffer because 5% is chump change and doesn't even open negotiations. The lender has nothing to lose by waiting until you either bid against yourself or want to sell or refinance.



    Probably should have offered that.
    What would more likely be accepted, is if you offer an amount that covers a good chunk of the principle...at least 50% of the principle. A big chunk of your balance is interest after all of this time. They are far more likely to waive interest.

  6. #16
    Join Date
    Feb 2014
    Posts
    20

    Default Re: Second Mortgage Settlement

    I'm just mad I didn't take care if this earlier. Now I want to buy another house. Right now the mortgage doesnt show on my credit report. If i refinance it will and then i wont be able to get a new house. If i rent out my current house and look for a new house, i could i guess wait to refinance.

  7. #17
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Second Mortgage Settlement

    Such is the nature of chapter seven bankruptcy. You don't have any equity here. If you were selling you might convince the second to take a short sale, but I'm not seeing them taking chump change when looking at a $54K note with about half that equity remaining.

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