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I run into this type of situation all the time concerning modifications when a home owner has a 1st and 2nd mortgage.
Suzie is correct about a secured loan, but in Lein Holders Position, the 2nd mortgage is behind the 1st mortgage.
If the second wanted to foreclose, they would have to payoff the 1st mortgage.
The worst your 2nd lender can do is file a judgment with the courts, then have a sheriff visit you to confiscate personal property.
Again that is the worst I have ever heard about taking person propriety. It is very unlikely they will pursue that, because it can take up to a year to make it to court. Then all you have to do is file another bankruptcy. Depending on the amount, very few attorneys will work on this type of collection, because when you file B.R., they don't get paid.
What I am seeing with second lenders, most of them are willing to accept a lower settlement. One of my recent clients - her 2nd lender she owed $79k, settled for $9k.
What you want to do is contact them, in these words. A relative is looking to help you out, to save you from going back into bankruptcy. Your 1st offer, you want to settle at $00.07 on the dollar. Then they come back with a lower amount, then tell the the max you will settle for is $00.10 on the dollar.
You do want to take care of this, because this type of debt will follow you.
Most bad debts / collections left unpaid, fall off a credit report after 7 yrs. All they have to do it wait till the 6yr, the 11th month, the last hour to report this to the credit agencies again. Then the bad debt will remain on your credit report for another 7 yrs. I have seen this happen.
I am not sure of your age - a person in their 30's with bad credit has time. A person in their 40's needs to have a plan. A person in their 50's is in the danger zone. Once you get into your 60's, it will be very hard to turn your credit score around. It is a fact that people with lower credit scores, always pay higher payments.
Frankly asking - have you asked yourself if you have a plan for your future?
Good Luck
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Last edited by Modification Specialist; 05-27-2010 at 03:34 PM..
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