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Levitt & Slafkes, P.C. - Essex County Bankruptcy Attorneys

Get The Fresh Start You Deserve

Levitt & Slafkes, P.C. - Essex County Bankruptcy Attorneys
GET THE FRESH START YOU DESERVE

Bankruptcy &
Debt Relief For
Individuals and
Businesses

Chapters 7, 11
and 13

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Foreclosure
Defense &
Mortgage
Litigation

Saving Homes
Fighting Banks

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Loan
Modifications

Preventing
Foreclosure

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Commercial and 
Bankruptcy
Litigation

State Federal &
Bankruptcy Court

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Bankruptcy & Debt Relief For
Individuals and Businesses

Chapters 7, 11 and 13

Find Out
More

Foreclosure Defense &
Mortgage Litigation

Saving Homes Fighting Banks

Find Out
More

Loan Modifications

Preventing Foreclosure

Find Out
More

Commercial and Bankruptcy
Litigation

State Federal &
Bankruptcy Court

Find Out
More

How to Eliminate Your Second and Third Mortgages From Your Home

| Apr 25, 2013 | Chapter 13 Bankruptcy |

If you have more than one mortgage on your home and the value of your home is less than what you owe on it under your first mortgage, you may be allowed to “strip” the subordinate mortgage lien in a Chapter 13 bankruptcy. Many homeowners obtained second mortgages in the form of home equity lines of credit when the value of their home was much higher than it is now. With the real estate market in a slump, it is common for the value of a home to be less than what is owed under the first mortgage loan, much less under the second loan! So, how does lien stripping work?  A Chapter 13 debtor must prove that the value of the home is insufficient to be used as collateral for the second or third mortgage.  As a result, the lien should be removed or stripped from the home.  For example, if the debtor owes $100,000 on the first mortgage and $20,000 on a second mortgage, but the value of the home is only $95,000, the debtor can argue that the second mortgage should be treated as an unsecured debt. Unsecured creditors are often paid pennies on the dollar, if anything, under a Chapter 13 plan. This could save you thousands of dollars! If you are considering filing a bankruptcy case and you have more than one mortgage lien on your home, you should discuss the possibility of filing a Chapter 13 case with the attorneys at Levitt & Slafkes, P.C. If you are interested in learning more about Chapter 13 bankruptcy cases or lien stripping, contact Levitt & Slafkes, P.C. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation today.  

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