With the state of the current economy many home owners are finding out that their homes may be under water by quite a bit of money. Furthermore, some debtors are finding that they simply cannot pay on their second mortgage. If this sounds like your situation, you should consult a bankruptcy professional in order to learn about what options may be available to you through the United States Bankruptcy Code.
A bankruptcy attorney can figure out whether you qualify to strip your second mortgage through a chapter 13 bankruptcy. In order to file a chapter 13 bankruptcy, debtors must have disposable income which they can put towards the payment of a chapter 13 plan. Second mortgages may not be stripped through a chapter 7 bankruptcy, which would discharge most unsecured debts without a payment plan. In order to qualify to have our second mortgage stripped the actual value of your home must be less than your first mortgage, leaving the second mortgage completely unsecured and available for discharge in a bankruptcy.
If your first mortgage is not worth more than what your home is worth, you second mortgage may not be discharged. The first step in determining if you second mortgage is available to be stripped is to determine the actual value of your home. This can be done by by visiting a realtor and performing a market analysis based on comparable properties that have sold in your neighborhood. If it is determined that your property is eligible to strip the second mortgage, then after filing your chapter 13 case, a motion to strip the mortgage needs to be filed, or an attorney may strip the mortgage through an adversary proceeding. The property lender has the right to challenge the motion if they believe that the property is still secured by the second mortgage. If that is the case a judge will have to rule on the matter and make a final decision.
If you need more information please call 206-682-7975 to learn if you are a candidate to strip your second mortgage through bankruptcy.