My question involves bankruptcy in the state of: South Dakota
My wife & I live in South Dakota, and recently had our debts discharged in Chapter 7 (filed approx. 9/10/09, discharged 1/5/10 pending 2009 tax return). We had 2 mortgages; the first through PNC (original for $136K with balance of $122K), and the 2nd through US Bank (original $44K with balance of $40K). We haven't been paying either mortgage since Sep '09 but still occupy the house. We also had about $25K in unsecured debt.
In the terms of the bankruptcy, we neither reaffirmed nor surrendered both mortgages. Our lawyer said we wouldn't qualify for a lien-strip since we had equity built up in our first (and we didn't want to be locked into the house just because of the 2nd mortgage), so we thought we'd leave it open for a potential negotation. I guess my question is if there is any way to keep the house without reaffirming both mortgages? The 2nd was killing us, especially after we ran into financial trouble with medical bills and a loss of income (wife hasn't worked since May '09), but could manage with just the 1st.
We know (and are planning on) a foreclosure is coming, but we still plan to occupy the house until that happens. I just didn't know if we had any options where we could still keep the house without owing over $160K on a house that's worth about $135K?
Also, since we're still occupying the house, our lawyer advised us to carry a homeoners policy, but are we still liable for the property taxes?
Any answers you can provide would be greatly appreciated.