Can you strip a second mortgage in Chapter 7?

Can you strip a second mortgage in Chapter 7?

Usually you cannot strip junior liens, second mortgages, or HELOCs in Chapter 7 bankruptcy. If you satisfy certain requirements, you can eliminate a second mortgage, home equity loan, home equity line of credit (HELOC), or other junior lien from your house in bankruptcy through a process called lien stripping.

How do I get rid of a second mortgage lien?

In order to remove your second mortgage off your property you must initiate an adversary proceeding or file a lien stripping motion with the court. Most courts require that you file a lien stripping motion that will allow you to obtain a court order approving the removal of your second mortgage.

What is a second lien mortgage?

A second mortgage or junior-lien is a loan you take out using your house as collateral while you still have another loan secured by your house. The term “second” means that if you can no longer pay your mortgages and your home is sold to pay off the debts, this loan is paid off second.

What can I do if I am behind on my mortgage?

Here are five ways to catch up on your mortgage payments:

  1. Refinance your mortgage.
  2. Apply for mortgage forbearance.
  3. Negotiate a loan modification.
  4. Reduce your monthly housing payment.
  5. Set up a repayment plan.

Can a second mortgage be stripped in Chapter 7?

Usually you cannot strip junior liens, second mortgages, or HELOCs in Chapter 7 bankruptcy. But you might be able to in Alabama, Florida, and Georgia. Please answer a few questions to help us match you with attorneys in your area.

Can a Chapter 7 lien be removed from a house?

Chapter 7 Bankruptcy does not remove that kind of lien from your house, not in the 9th Circuit Appeals Court’s jurisdiction. Therefore, if the value of the house is high enough, then your 2nd mortgage lender can foreclose that lien, but in order to do so, it must pay off the 1st mortgage and any unpaid property taxes first.

Can you remove a second mortgage in Chapter 13 bankruptcy?

Lien stripping is a process that allows bankruptcy debtors to strip off (eliminate) wholly unsecured junior liens (such as second mortgages, home equity loans, and HELOCs) from their homes. In most cases, you can only get rid of your second mortgage or other junior lien if you file for Chapter 13 bankruptcy.

Can a junior mortgage lien be voided in Chapter 7 bankruptcy?

A debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under 11 U.S.C. § 506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the creditor’s claim is both secured by a lien and allowed under Section 502 of the Bankruptcy Code.

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