top of page
  • Writer's pictureRedd Law, PLC

You Can Get Rid of Your Second Mortgage

One of the benefits of filing Chapter 13 bankruptcy is removing a second mortgage on your personal residence. This process is called “lien stripping.” You can qualify to “strip” the second mortgage if the balance owed on your first mortgage is greater than the current market value of your residence.

An example is if you purchased your home for $200,000 and the value of your residence has gone down to $150,000. You have two mortgages on your home. The balance owed on your first mortgage is $170,000. The balance owed on your second mortgage is $50,000. Since the balance owed on your first mortgage ($170,000) is higher than the current market value of your residence (“$150,000), you can eliminate (“strip”) your second mortgage.

If you are behind on your mortgage payments and are worried about foreclosure, lien stripping is a powerful remedy provided under bankruptcy law.

1 view0 comments

Recent Posts

See All

Michigan Homeowner Assistance

Michigan homeowners who are defaulting on their mortgage or property taxes can receive financial assistance through the “A Step Forward” program. Homeowners who have had a financial hardship can apply

Determining Property Values in Bankruptcy

Everyone who files bankruptcy must disclose all of their real and personal property. The value of real estate can be easily done with an appraisal or market analysis. For cars, debtors can look at t

The Role of Chapter 13 Trustees

Anyone who files a Chapter 13 bankruptcy petition gains some familiarity with a Chapter 13 trustee. In Detroit, there are three Chapter 13 trustees. Each trustee administers cases assigned under a p


bottom of page