The basics of lien stripping and second mortgages

Time for a little stripping, anyone?

I’m not suggesting that you show up at the Cabaret Lounge with a fistful of dollars; instead, I’m thinking you might want to know how to get rid of a second mortgage with a Chapter 13 bankruptcy case.

Brett Weiss, an attorney from Maryland, explains the basics of how to do it if you click here.

The key points to remember are:

* The second mortgage (a.k.a. home equity line) must be completely underwater;

* You must meet the general qualifications of Chapter 13; there are several, but the principal one of interest here is that you must have enough income to make monthly payments to the Chapter 13 trustee. The amount of the monthly payment will vary according to the particulars of your case.

* Your lawyer must specifically ask the court (by filing a motion) to strip the mortgage. There will often be an additional hearing at the Bankruptcy Court on this motion.

* You must successfully complete your Chapter 13 plan by actually making all the required monthly payments to the trustee. Chapter 13 plans last for between 36 and 60 months (three to five years).

* If you do succeed, the second mortgage, as well as the remainder of you unsecured debts will be gone!

 

By Doug Beaton

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