Chapter 13: Lien Stripping a Second Mortgage
One of the reasons individuals and families decide to use
Chapter 13 for their mortgage is because they want to save their family home. Chapter
13 allows for that possibility. There are a number of different methods
that can be used to assist you in that process. Our lawyers will help
you to look at all of your options and make an educated decision that
is right for your situation.
At Sulaiman Law Group, LTD., we work hard for our clients. Our experienced
lawyers know how to use the law for your benefit. We handle
bankruptcies day-in and day-out, and will work with you to identify the best strategies
for your family. Located in Oak Brook, Illinois, our law firm serves Chicago
and the surrounding areas.
Contact a Chapter 13 bankruptcy attorney by calling us at 312-313-1613.
Stripping Off a Second Mortgage
By filing a Chapter 13 bankruptcy, under certain circumstances you may
be able to get rid of a second mortgage on your home. In order to understand
how it works, you must remember that there are two types of debt, secured
Secured debt: This type of debt is generally attached to a tangible item, like a house or a car.
Unsecured debt: This type of debt is not attached to a tangible item, like credit card debt.
How Does It Work?
Let's say that Blake and Crystal* own a house worth $400,000. The couple
owes $405,000 for the first mortgage and $100,000 on the second mortgage.
So, clearly, they owe a total of $505,000 on the home. Therefore, the
home is upside down; they owe more on the home than it is worth.
Because the house is only worth $400,000 and the first mortgage exceeds
the value of the property, the second loan of $100,000 is no longer considered
secured debt because it is not backed by the home. It is akin to credit
card debt (which is unsecured). And, as unsecured debt, it is possible
under Chapter 13 bankruptcy to strip the second mortgage off of the home.
Contact a Chapter 13 Bankruptcy Lawyer
If you are looking for creative, legal solutions to answer your debt situation,
you need to speak with the Chicago bankruptcy lawyers at our law firm.
We understand bankruptcy and other debt relief options and will help you
find the solution that fits your problem.
Contact us online or by calling us at
*Blake and Crystal are fictitious characters created for the purposes of
explaining and illustrating various bankruptcy situations.