Did you lose your home in a foreclosure? Many people in California, and around the country, have had to go through the troubling and painful process of foreclosure during these past few years. The mortgage that you had while you bought and were paying for the home will go away when you file bankruptcy in California based on the non-recourse law. However, this does not apply to a second mortgage that you might’ve taken out on your home later.
This means that even if you lost your home to foreclosure and believed that you at least no longer had that debt hanging over you, it is possible that you still owe on the second mortgage. This is the last thing that you need at that point, and often the last thing that you would expect.
One of the things that you can do to help deal with this debt is to file bankruptcy. It is going to discharge the debt. Because it is an unsecured debt, you will be able to discharge it just as you would other types of debt. If you are in this situation, you are going to want to file as soon as possible. It’s better to file as quickly after the foreclosure as possible, so that you do not start rebuilding credit only to have to go through a bankruptcy when this happens. Doing both at the same time is going to make it easier for you to rebuild your credit and your life later.