Stripping a Lien on a Principal Residence in a Chapter 13 Case.

ELIMINATE SECOND AND THIRD MORTGAGE IN CHAPTER 13 BANKRUPTCY

The ability to strip off or eliminate second and third mortgages from the client’s principal residence is one of the things that makes Chapter 13 a great bankruptcy alternative. In a Chapter 13 case a property that has lost value because of the poor housing market can be made into a better more affordable investment. You own a home that is your principal residence. You owe a mortgage and a few years ago when the real estate market was good you took out a home equity line. Now the market has fallen and the value of the house is less than the amount owed on the first mortgage. Now you have a home that has very large negative equity.

GET HELP FROM BANKRUPTCY ATTORNEY TO STRIP OFF THE SECOND MORTGAGE

In a Chapter 13 bankruptcy you can eliminate that negative equity under the right circumstances. Based on a valuation of the home, A knowledgeable bankruptcy attorney can file a motion asking the court to take that equity mortgage of the home and strip it off the real estate so you no longer have a second or third mortgage. For this to work you need a proper valuation showing that the first mortgage holder is owed more than the value of the home. At Broumas Law Group LLC our bankruptcy lawyer has extensive experience helping Maryland clients save their home, eliminating valueless mortgages and by doing this getting rid of the burdensome payment obligation of that second or third mortgage.

IF LOAN MODIFICATION DOES NOT WORK

Chapter 13 does not let you change the amount owed the first mortgage on your principal residence. Chapter 13 does  give you the ability to take however many months you are behind with that mortgage company and force them to let you catch those arrears up over a 5 year period. Chapter 13 is an excellent tool to empower you and prevent mortgage companies who have not been cooperative with the loan modification process from taking your home away from you.