There are so many people these days who are struggling to make ends meet because of the enormous debt on their home. It is not entirely uncommon for these people to have a second and in some instances a third mortgage on their home. They love their home and don’t want to lose it, but the multiple mortgages creates a financial bind that leaves them living paycheck to paycheck, or, even worse, it does not allow them to make ends meet and they are falling behind on their bills.
Chapter 13 bankruptcy provides the tools necessary to help unfortunate individuals in these situations. In Chapter 13, it is possible to “strip” a second mortgage or Home Equity Line of Credit from your home and free you of the burden of making those large monthly payments on a home that is no longer worth the loan that you took out to pay for it.
To strip a second mortgage certain conditions must be met. First, the home must be valued at less than what you owe. Second you must file a chapter 13 bankruptcy. After you file the chapter 13 bankruptcy, you must file a law suit within the bankruptcy and prove before the court that the value of the home is less than the amount that is owed on the first mortgage. The process can be complex and requires the assistance of an experienced attorney.
If you have questions about bankruptcy or stripping a second mortgage from your home, contact an Arizona Bankruptcy Attorney at Riggs Ellsworth and Porter.