Many people have more than one mortgage on their home and the value of their home is less than the total amount of the first mortgage loan. This is commonly referred to as being “underwater” on your home. If you are underwater on your home and you are facing financial struggles, you should consider filing a Chapter 13 bankruptcy.
A homeowner that is underwater on their house can take advantage of “lien stripping” in a Chapter 13. In other words, you can eliminate your second and third mortgages because there is no equity in your home to support the secured status of these loans. Thus, your second and third mortgage is essentially an unsecured debt. Typically, an unsecured creditor in a Chapter 13 is paid pennies on the dollar owed, if anything at all! Thus, the lien stripping process can save you thousands of dollars.
It is important to understand that in order for the lien stripping process to be effective, you must successfully complete your Chapter 13 case. This means that you must make all of the payments required under your Chapter 13 plan. If you fail to complete your repayment plan, the second (and third, if applicable) mortgage liens will not be eliminated.
Finally, lien stripping is not available in a Chapter 7 filing in most states, including Wisconsin. Thus, if you have more than one mortgage on your home and you would like to learn more about the lien stripping process, contact us today to schedule an appointment!
The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office, LLC handle Chapter 7 and Chapter 13 bankruptcies, as well as student loan assistance, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense and debtor’s rights matters. We serve the areas of Milwaukee, South Milwaukee, West Milwaukee, Milwaukee County, and Waukesha County, including the municipalities of Big Bend Village, Brookfield City, Brookfield Town, Butler Village, Chenequa Village, Delafield City, Delafield Town, Dousman Village, Eagle Town, Eagle Village, Elm Grove Village, Genesee Town, Hartland Village, Lac La Belle Village, Lannon Village, Lisbon Town, Menomonee Falls Village, Merton, Town, Merton Village, Mukwonago Town, Mukwonago Village, Muskego City, Nashotah Village, New Berlin City, North Prairie Village, Oconomowoc City, Oconomowoc Lake Village, Oconomowoc Town, Ottawa Town, Pewaukee City, Pewaukee Village, Summit Town, Sussex Village, Vernon Town, Wales Village, Waukesha City, and Waukesha Town. Call DeLadurantey Law Office by phone at (414) 377-0518.