Understanding Lien Stripping And Second Mortgages

With a Chapter 13 bankruptcy, you may be able to discharge the debt you owe on a second home mortgage. Here is how it works:

  • If the amount of debt you owe on your first home mortgage is more than the current value of your home, you may be able to strip a second home mortgage lien through a Chapter 13 bankruptcy.
  • The second mortgage debt thus becomes an unsecured debt. All or a part of your second mortgage debt may potentially be discharged in your Chapter 13 bankruptcy.
  • You pay a monthly bill toward your home in accordance with your Chapter 13 debt repayment plan and you may keep your home, while avoiding all or part of the debt owed on the second mortgage.

At the Law Offices of James V. Sansone in Santa Rosa, California, we are committed to helping people find solutions to difficult debt challenges.

Eligibility For Chapter 13 Bankruptcy

To be eligible for Chapter 13 bankruptcy, you must have a regular source of income with which to make monthly payments. However, you may repay any mortgage loan arrears gradually over a three- to five-year Chapter 13 debt repayment plan. Additional debt relief is available. Visit our section on Chapter 13 bankruptcy to learn more.

Can I Discharge A First Home Mortgage?

Unfortunately, you may not discharge the debt owed on a first home mortgage and still keep your home. However, a Chapter 7 bankruptcy may allow you to discharge other debts, thus enabling you to make your monthly mortgage payment if you have a regular source of income.

If you are unable to save your home from foreclosure, your home mortgage lender may seek additional payment from you in the event that a foreclosure sale does not satisfy the remaining debt owed on your home. In this event, a Chapter 7 bankruptcy may be necessary to discharge any debt from a foreclosure sale deficiency.

Get The Help You Need | Call Us Today

If you are trying to save your home from foreclosure, want to learn more about second mortgage lien stripping or need debt relief after a home foreclosure, we are here to help. To schedule a consultation contact us at 707-623-1875.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.