Don’t Miss Out On The Most Powerful Tool In Consumer Bankruptcy
As a San Diego Chapter 13 Attorney, I can tell you that because of the decline in housing values, we have seen a little known bankruptcy rule gain incredible momentum and power. I submit to you, without hesitation, that this rule is the most powerful tool in consumer bankruptcy right now. This rule is known as “lien stripping.” Lien Stripping is the ability of the bankruptcy court to convert secured debt into unsecured debt. If the debt is unsecured, then it can be eliminated at the time of discharge. That’s right, eliminated at the time of discharge.
There are a couple of conditions on this process, so let’s see how this works. First, let’s assume you own a home (even though this may work with other debts) and that home is worth $300,000.00. The home was probably worth quite a bit more a few years ago. Next, we look at what you owe on the home. Let’s say you owe $310,000 on a first mortgage and $90,000.00 on a second mortgage for a total of $400,000.00 in debt.
In this particular case, our San Diego Chapter 13 lawyers would make a motion with bankruptcy court to strip away the second mortgage. That’s right! Because there is no equity in your home, the second mortgage lacks any security. It is, therefore, unsecured and dischargeable. Before the Chapter 13 filing, you were $100,000 upside-down on your property. After the Chapter 13 bankruptcy you are only $10,000 upside-down. How powerful is that?!
Our Award Winning bankruptcy attorneys have been helping people get rid of their 2nd mortgages since 1976. We recommend that all homeowners who have two mortgages, and are upside-down on their property, give us a call for a free consultation. We can give you all your options and see if a Chapter 13 can help you reduce your mortgage payments and get you close to having positive equity in your property. You really can take advantage of low home prices. Call our office today for a free confidential consultation, download a copy of our FREE California Guide to Bankruptcy or find out how you can become a client right away!