Cramming Down Second Mortgages in Bankruptcy/State of the Economy
The promise of a bill to handle delinquent first mortgages through the bankruptcy process died a quiet death. Meanwhile, the government appears to be relying more on the regulatory mechanism to handle the economic malaise that has swept the country since the end of 2007. By most estimates, this recession actually began a long time ago, but the full impact of it has not really been felt by most people until recently. With consumer spending down 1% this past March, any recent optimism may be false hope for the time being. Also, unemployment continues to climb.
Where does this leave you, the strapped homeowner, delinquent on your mortgage payments. It may be that you also took out a second home equity line of credit, which by now has been entirely spent. Depending upon the value of your home, your second mortgage may be removeable, you might be able to both lower your total mortgage payment and pay back your delinquent payments through the bankruptcy process. Don't discount bankruptcy as a possible valid option in your case.
