I filed for chapter 7 bankruptcy in 2007 because of a failed business venture. All of my debts were discharged, but the business lender retained a $250K lien on my home. Excluding the lien, I have a combined first mortgage and credit line balance of $305K, and my property is valued around $345K. Is there any way that I can negotiate with the lender and eliminate the lien so that I will be able to refinance or sell my house without any obstacles?
If the property is valued at $345K and you have debts of $555K, someone is drastically under-secured. We have to assume that the business lender was excluded in the bankruptcy and that they are the second lien and are almost completely unsecured.
In today's property value problems, you certainly could contact them and offer a lump sum payment payment as payment in full. Their decision will be based on your repayment history, the property value, the local market, the return they are currently realizing on the loan and the future prospects for their loan. They have no obligation to entertain an offer, but they may well. Negotiate the terms yourself or through an attorney. Certainly you will want to complete the transaction through an attorney to ensure the debt is eliminated based on the settled amount and the lien released.
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If the property is valued at $345K and you have debts of $555K, someone is drastically under-secured. We have to assume that the business lender was excluded in the bankruptcy and that they are the second lien and are almost completely unsecured. 