Filing Bankruptcy Under Chapter 13 May Wipe Out Your 2nd Mortgage PDF Print E-mail
Written by K. Hunter Goff   
Monday, 06 September 2010 19:30
According to a recent story in the Orlando Sentinel, Orlando home values continue to decline. As an Orlando bankruptcy lawyer, I have witnessed this first hand. Now, I know you didn't need the Sentinel to tell you that, but I digress.
by K.HunterGoff


According to a recent story in the Orlando Sentinel, Orlando home values continue to decline. As an Orlando bankruptcy lawyer, I have witnessed this first hand. Now, I know you didn't need the Sentinel to tell you that, but I digress.

Sadly, this is true for much of the country and just about all of Florida. These days, it appears as though everyone is upside down on their homes. Luckily there is some relief for people who are filing bankruptcy under Chapter 13. It has become common place in Orlando for me to file a motion in my client's Chapter 13 bankruptcy case, petitioning the court to completely eliminate their 2nd mortgage balance.

To benefit from this relief option, an appraisal must be done on the home, showing that the home's value is below the balance owed on the 1st mortgage. A respected Illinois and Wisconsin bankruptcy lawyer, David Leibowitz, blogged recently about options available to those stripping a 2nd mortgage .

Here in Orlando, a recent opinion was issued by a Bankruptcy Judge that says you can only strip off a 2nd mortgage in a Chapter 13 bankruptcy case. This type of relief is not available in Chapter 7 cases. Also, you must successfully complete your Chapter 13 payment plan, and receive your Discharge Order from the Court before the mortgage will be totally gone.

Eventually, we should start to see a reverse in the declining home values plaguing Orlando, Florida, and the rest of the county. At that time, those who took advantage of the lien stripping option in Chapter 13 bankruptcy and successfully completed their payment plan, will, hopefully, again have equity in their homes.

In addition to reaching this goal, my Chapter 13 bankruptcy clients can also eliminate credit card debt, save money on car loans, and attain a fresh start financially. By filing bankruptcy with the help of an experienced bankruptcy lawyer, you can achieve your financial goals.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Are you considering filing for bankruptcy? Check out K. Hunter Goff's FREE eCourse. Hiring a lawyer is an important decision, make sure you have an experienced bankruptcy lawyer to work for you.