Lawyers To Help You Strip Off A Second Mortgage
Is your home worth less than the mortgages taken out against it? If you have taken out second, third or fourth mortgages against your home, you may be able to strip those liens from your deed by filing Chapter 13 bankruptcy.
Lien stripping is a complex process but it can be a practical option depending on your situation. A real estate appraisal and payoff figures for your first mortgage are often required to determine if this is a viable option for you.
Experienced Debt Relief Attorneys
The bankruptcy and lien stripping attorneys of The Day Law Office in Spring Hill, Florida, are here to help you find your way clear of debt. We offer a range of debt relief services to help you:
- Reduce your mortgage debt through Chapter 13
- Fight foreclosure proceedings
- Eliminate unsecured debt like credit cards through Chapter 7
- Stop creditor legal actions such as wage garnishment, liens and repossession
- Stop harassing phone calls and threatening letters
Our lawyers offer an initial consultation to discuss lien stripping and how it works when you file Chapter 13 bankruptcy.
What Is Lien Stripping?
When a lender has a lien on your property, they have a right to take the property if you stop making payments. Lien stripping involves the reclassification of a second or third secured lien to an unsecured lien.
Once we are able to reclassify the lien as unsecured, it is placed with the other unsecured debt and paid according to the Chapter 13 plan. When the lien has been stripped from a mortgage, the loan is no longer secured. It becomes an unsecured debt like a credit card bill, and the lender no longer has a right to take your property as long as you remain in the Chapter 13 plan and complete the Chapter 13 plan.
Here’s an example of how lien stripping works:
- Fair market value of home: $250,000
- First mortgage: $260,000
- Second mortgage: $50,000
In this example, the entire $50,000 second mortgage could be reclassified as unsecured debt and stripped by filing Chapter 13 bankruptcy. The caveat is that you complete the Chapter 13 plan over the court-appointed period of three to five years. Language in the orders state that if the Chapter 13 plan is not completed, the lien will remain in effect.
The unsecured portion of your mortgage would be placed with other unsecured debts in your debt repayment plan. The percentage of unsecured debts that you will have to pay will depend on your income and assets. Many people who file Chapter 13 bankruptcy only have to pay back a small percentage of unsecured debts. We would not be able to advise you as to your specific situation without a consultation.
Call An Experienced Foreclosure Defense And Chapter 13 Bankruptcy Attorney
*We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.