Is There Anything that I Can Do About This in a Bankruptcy Case?
With the recent downturn in the housing market, many homeowners that have a second mortgage find themselves in the situation where they owe significantly more on their mortgages than their property is worth.
If you have a second (junior) mortgage against your real estate, bankruptcy law may permit you to eliminate the lien for the second mortgage if there is no equity in the property for the lien to attach to. For example: Suppose you own a house that is worth $100,000. The balance owed on your first mortgage is $105,000. You also have a second mortgage against the property that has a balance of $35,000. Under bankruptcy law, you may be permitted to eliminate the second mortgage lien and treat the debt for the second mortgage as unsecured in a Chapter 13 Bankruptcy Case.
Being able to eliminate or “strip off” a second mortgage can be extremely beneficial to Debtors in saving their homes because it can eliminate the payment on a second mortgage.
In order to discuss the possibility of eliminating your second mortgage in a Chapter 13 bankruptcy Case, contact our Birmingham Bankruptcy Lawyers at Over the Mountain Law Center today. Our experienced Consumer Chapter 7 and Chapter 13 Attorneys will discuss your available options under Bankruptcy Law.