If you are a homeowner concerned about keeping up with your mortgage you should make sure to read the sections on Chapter 13 and “Saving Your Home, Even If You Are Behind On Your Mortgage“. If you have a second mortgage you need to know that there might be a way to strip (this basically means ‘eliminate’) the entire second mortgage. Many attorneys and even bankruptcy attorneys do not know how to do this. You must have a top bankruptcy attorney who understands how this works. Even if you are contemplating Chapter 7 Bankruptcy, if you have a home with a second mortgage, you owe it to yourself to consult the right attorney. Though Chapter 7 might seem better for you, for debtors with two mortgages, Chapter 13 might get you a much better result in the long run.
Stripping your second mortgage requires a separate motion with the court. A motion is the legal term for a written legal request. Different courts have different ways of describing and organizing the process of getting rid of a second mortgage. Also there are a lot of complicated steps. Not everyone can do this. The laws differ from state to state and even district to district. In short, you really need an attorney to do this right. However, the basic process is as follows:
- file Chapter 13 bankruptcy
- file a motionor other ‘request’ for a hearing with a judge
- a.the hearing with the judge is where you will explain to the judge why she should remove the second mortgage from your house.
- make sure to give proper notice to the creditor
- attend the hearing with the judge and argue your case
- prepare and submit the order to be signed by the judge. The order is the judge’s demand that the second mortgage company remove its claim from your home and that the mortgage company forever goes away.
Generally speaking, you can not remove a second mortgage if your house has equity. You can only remove the second mortgage if the first mortgage is equal to or greater than the full value of the house. AND, depending on your state, your second mortgage might have to impair an exemption before it can be removed.
Through most of my website I take great care to explain things in a way that most non-lawyers could understand. With this one, I am not trying so hard. Why? Because it is not something I can encourage people to consider without help from a really good lawyer. It is really one of those cases where a little knowledge can be more dangerous than none. So, if this is interesting to you and you have a second mortgage. Contact me or another trusted bankruptcy attorney in your area.