What Will Happen to My Second Mortgage During Bankruptcy?
If you are considering bankruptcy, you have a second mortgage on your home, and you live in New York, you need to ask your bankruptcy lawyer about lien stripping. What is Lien Stripping? Lien stripping is part of a process that transitions your second mortgage from a secured loan to an unsecured loan. This option is only available under certain circumstances: You are declaring Chapter 11 or 13 Bankruptcy. Lien stripping is not allowed under Chapter 7.* The total assessed value of your home is LESS than the value of your first mortgage. For example, if your home is currently worth $400.000.00, and you owe $450.000.00 on your primary mortgage and $50,000.00 on your second, you would be able to have your second mortgage stripped. How Does This Process Work? As part of the debt restructuring process (Chapters 11 and 13), your second mortgage can be turned into an unsecured loan (like your credit card debt). When working with you...