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Lien Stripping - Discharge of Second DeedBy filing Chapter 13, you may save thousands of dollars using lien stripping!(California exempt assets- click here) |
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Learn How You May Be Able Strip a Second Lien
First, I want to point out all Chapter 13 bankruptcy cases are not created equal. This article applies to most bankruptcy filings however the second must be totally upside down. There are always circumstances that may make your case different from the norm. That is why it is so important that you have an attorney who fully understands this method and the bankruptcy codes. Filing for bankruptcy is a somewhat complex process and Chapter 13 is even more so especially if it involves lien stripping.Possible Lien Stripping ProblemsIf your home value appears to be greater than the amount owed on the first, it may not qualify for lien stripping.. Many times getting an appraisal if the value seems borderline may be beneficial to you so you might be able to get the value set below the amount needed to strip the second.
1. Some may not qualify for Chapter 13 because they owe too much in unsecured debt, so filing a Chapter 7 to get rid of the debt would allow the person to file Chapter 13 after the discharge. The problem here is that you have to wait to file a Chapter 13 and with the home values varying so much, the home value might increase which would prevent striping of the junior lien.
2. Some also may not qualify due to too many secured assets. In other words, they are over the debt limit of a Chapter 13. If this happens, filing a Chapter 7 could reduce it to a level that is allowable.
3. Your income may not be enough to file a Chapter 13. You have to have enough income to make payments under a Chapter 13 plan.
5. Your house value has increased and the lien is now secured and can not be stripped. Can I Strip My First Mortgage or Do a “Cram” down? At this time the answer is NO. Lien stripping only applies to seconds or what may be called junior mortgages on the personal residence.
What Are Some of the Requirements? In order to strip a second or a junior lien (mortgage) the lien must be totally unsecured. What this means is that the amount you owe on the first mortgage is more than the value of the lien.
Example: On the first mortgage, you owe $300,000 and the market value at the time of filing the Chapter 13 is $275,000, this means you owe more than what it is worth. Thus, the second or any other junior liens would be worthless.
Will I Have To Make Payments if the Junior Lien is Stripped? You may have to make some payment since after stripping the lien it is treated as the balance owed as an unsecured creditor. Many times this is only a few cents on the dollar.
How Long Does My Chapter 13 Plan Last? In order to get a discharge in a Chapter 13 the plan must be finished and a discharge granted. Most plans are either 36 months or 60 months. Another point I want to make is that there currently is no provision of the Bankruptcy Code that requires the lien strip to be discharged under a Chapter 13.
There are many more Chapter 13 bankruptcy issues I can discuss with you after reviewing your pre-bankruptcy documents. This is one reason we offer a pre-bankruptcy review to determine what your best options are and then present them to you for discussion.
Chapter 13 Bankruptcy is complex and my goal is to provide my clients with their best debt relief option as the code will allow and at a reasonable price. ____________________________________________________________________
Prior Bankruptcy Filing under 2005 BAPCPA - When you can file another bankruptcy.
1. If you received a chapter 7 discharge, you cannot file another chapter 7 for eight years after discharge. 2. If you received a chapter 7 discharge, you cannot file a chapter 13 bankruptcy for 4 years after discharge. 3. If you received a chapter 13 discharge, you cannot file a chapter 7 for 6 years after discharge of chapter 13. 4. If you received a chapter 13 discharge, you can not file a chapter 13 for 2 years after chapter 13 discharge.
Author: Attorney David A. Casey Copyright ©2010 by Attorney David A. Casey
San Diego, Chapter 13 Lien Stripping | Chapter 13 | Lien Stripping My office may be able to strip lien after a Chapter 7 bankruptcy Click here to find out about chapter 20.
San Diego, Calif. Bankruptcy Chapter 7. Free Bankruptcy Consultation. San Diego Chapter 13 Lien Stripping | Discharge of 2nd Deed Looking to file a Chapter 7 bankruptcy. Not sure if you qualify for a Chapter 7. Free bankruptcy consultation & Pre-filing Bankruptcy. San Diego , CA 619 447-6780 Chapter 7 San Diego . Bankruptcy Code provides for liquidation & discharge debtor's debts and nonexempt property. Exempt property you can keep. San Diego , Chapter 20 |
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Lien Stripping, Chapter 7, Chapter 13 & Chapter 20 San Diego Free Chapter 13 lien stripping consultation just minutes away from San Diego |
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liens on your residence during a Chapter 13 bankruptcy. If
your loan is "upside down" (negative equity) on the first mortgage,
then you will most likely be able to
completely strip the second also called a junior loan. Many
times a Chapter 13 can be more beneficial than a Chapter 7 which can't strip a second on your real property.