How to Lien Strip a Second Mortgage or HELOC in Chapter 13 Bankruptcy
Is your home underwater? Our Riverside Bankruptcy Attorney can help you strip a second mortgage lien, home equity line of credit (HELOC) or other junior lien through a Chapter 13 Bankruptcy in Riverside CA.
Upon the court’s approval, the under secured second mortgage is stripped of its security interest against your house. The the “stripped lien” is then reduced to the level of an unsecured creditor and can the debts can be discharged upon completion of your Chapter 13 Bankruptcy in Riverside or Orange County Bankruptcy. Depending on your circumstances, you could strip your second mortgage lien for as little as a few hundred dollars a month and never pay the hundreds of thousand currently encumbering your home.
To qualify for a Chapter 13 bankruptcy lien strip your house, the amount of your first mortgage must be greater than the fair market value of your home, not taking into consideration any second mortgage, home equity line of credit (HELOC), third or even fourth mortgage. Essentially, your home must be “upside down” with just the first mortgage. If so, then the underwater or under secured second mortgage, home equity line of credit (HELOC) or other junior lien can be stripped of their security against your home.
To be clear, a lien strip does not eliminate the debt itself, rather, it changes the nature of the debt from unsecured to secured because of the lack of home equity in the home. Upon court approval, then you will only pay a percentage of the now “unsecured debt” through a Chapter 13 plan. Depending on your income, expenses and even jurisdiction of the Bankruptcy court, you may be able pay as little as a few hundred dollars a month for 3 to 5 years, after which your debt will be discharged forever.
Call our Chapter 13 Bankruptcy Attorneys in Riverside, Orange County and San Bernardino County to discuss your options and learn how you can strip your second mortgage or HELOC today.