Contact Us
Phone: 423-205-7744
Location
4416 Brainerd Rd.
Chattanooga, TN 37411
Hours
- Mon - Fri
- -
- Sat - Sun
- Closed
Call Now 24/7 Free Consultation: 423-205-7744
Chapter 13 Bankruptcy & Your Second Mortgage
One advantage to filing for Chapter 13 bankruptcy is the possibility of getting rid of second or third mortgages on your home or stripping home equity loans or HELOCs (home equity lines of credit). The elimination of these loan types is referred to as lien stripping.
In Chapter 13 bankruptcy, petitioners usually keep all their property. If the debtor has secured debts, they are required to stay current on their payments or they will lose the property used for collateral. Chapter 13 bankruptcy does make sure that filers can fulfill this requirement through the option of including arrearages in the repayment plan. Chapter 13 filers who wish to keep their home need to continue to make their mortgage payment and catch up on any past due amounts through the bankruptcy court’s repayment plan.
The Chapter 13 bankruptcy process may be slightly different when dealing with second and third mortgages or HELOCs. For instance, if the home value has decreased, and the equity in the home no longer covers the first mortgage on the house, the “additional” mortgages are no longer secured by the property. They essentially become unsecured debt, and the bankruptcy court may “strip off” second and third mortgages or HELOCs under these circumstances. Unsecured debt is given last priority in a Chapter 13 bankruptcy. While they are theoretically paid through the repayment plan, their last priority status means they often are not paid in full, and some do not have to be paid back at all. At the end of the three to five-year repayment plan, any remaining balance on second or third mortgages or HELOCs that were recategorized by the bankruptcy trustee as unsecured is discharged.
Most jurisdictions only make lien stripping available through a Chapter 13 bankruptcy. But if you are filing bankruptcy in Georgia, you may be able to remove junior liens in a Chapter 7 bankruptcy.
For assistance filing for bankruptcy or more information about lien stripping, please get in touch with the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.https://bankruptcychattanooga.com/contact-us/
The post Chapter 13 Bankruptcy & Your Second Mortgage appeared first on Kenneth C. Rannick, P.C..
Schedule a Case Evaluation
Contact us now!
Homepage FCE Form
By submitting this form, you agree to be contacted by our law firm, either by phone, text or by email.
Hours
- Mon - Fri
- -
- Sat - Sun
- Closed
Flexible Appointment Scheduling
24/7 Phone Availability
*$0 down to get your Chapter 7 case started applies to clients who choose to file a Chapter 7 bankruptcy with the U.S. Bankruptcy Court through Kenneth C. Rannick, P.C. We will open a Chapter 7 file for a client with as little as $0 down, however, our office will not file a client's Chapter 7 without an affordable down payment on attorney fees.
*$0 down to get your Chapter 13 case started applies to clients who choose to file a Chapter 13 bankruptcy with the U.S. Bankruptcy Court through Kenneth C. Rannick, P.C. Our law office will file a Chapter 13 without requiring any costs or attorney fees paid upfront for qualified clients who 1) have not had a prior chapter 13 dismissed within the past year, and 2) are not trying to stop a foreclosure within 20 days of filling bankruptcy.We are a debt relief agency.
We help people file for bankruptcy relief under the Bankruptcy Code.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.