When your house is worth less than the mortgage you have on it, you have an underwater - or upside-down - mortgage. At first glance, that might not seem like a big deal. As long as you keep paying your mortgage on time, it shouldn't affect you. But if you have two underwater mortgages, you may have cause for concern. It can become an even larger problem if you file for bankruptcy.
The real estate attorneys at Lynch Law LLC. can help you sort out your mortgage problems in a variety of ways. For example, there is a provision in Chapter 13 bankruptcy suits for stripping off your second mortgage. Our qualified Naperville foreclosure lawyers can remove the second mortgage and help you plan your repayment schedule.
Let's say your home is worth $200,000. You owe $210,000 on your first mortgage and $50,000 on a second mortgage. When you file for bankruptcy, you can request the removal of that second mortgage from your debts on the basis that your home is worth less than what you owe on your first mortgage. Your second mortgage is technically unsecured in that situation, and unsecured debts are wiped clean in successful Chapter 13 filings.
There are some problems associated with stripping off second mortgages. Unless the handling of the second mortgage is specifically included in your bankruptcy plan, you have to file a lawsuit against the mortgage holder in bankruptcy court to remove the debt. Our attorneys at Lynch Law, LLC. can help you file a lawsuit or get your second mortgage included in your plan. As skilled bankruptcy lawyers, we are very familiar with the regulations surrounding the removal of second mortgages.
Our attorneys are dedicated to helping clients eliminate their debts responsibly and legally by:
- Filing lawsuits. If a strip-off isn't part of your original plan, we can draft the lawsuit against your creditor to remove the mortgage. We know how to prepare the lawsuit to avoid potentially costly errors.
- Contacting your lender. Not every lender is amenable to a strip-off. We work with your lenders to rationalize why accepting the strip-off is a fiscally sound idea.
- Protecting credit. Some bankruptcy claimants ignore their credit reports, assuming their credit will be destroyed automatically. We can determine whether a strip-off will significantly harm your credit. We also help you structure your repayment plan to raise your credit score as you pay off your debts.
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