Has your bank started foreclosure (by filing Notice of Default) against your home because you are delinquent on your mortgage payments? Chapter 13 Bankruptcy may be your answer.
The filing of Chapter 13 automatically stops the foreclosure upon the filing in court of the voluntary petition. The Chapter 13 plan provides for payment of missed mortgage payments monthly over three to five years. Because the Chapter 13 Plan may provide for the payment of all missed mortgage payments over three to five years, you could catch up with mortgage payments over time and not with a lump sum payout to the mortgage company. Nor will you have to negotiate a loan modification. Of course, current mortgage payments that come due after the Chapter 13 is filed will be maintained.
Under very limited circumstances, you may be able to eliminate the second mortgage on your home. You may also refinance or sell your home during the course of your Chapter 13 (subject to court approval). You may decide that you would rather surrender your home. If so, you may accomplish this in either Chapter 13 or Chapter 7 Bankruptcy.