If you’re struggling to pay off a second mortgage, you may be wondering whether Chapter 13 bankruptcy will help. Sometimes, an experienced chapter 13 bankruptcy lawyer can investigate a legal approach known as lien stripping. The Massachusetts Bankruptcy Center assists homeowners across Massachusetts in determining whether this option may be part of the path to debt relief. Generally, lien stripping may allow a second mortgage or home equity loan that is completely unsecured to be regarded as unsecured debt if the value of the property is less than the amount outstanding on the first mortgage. If the property behind the first mortgage has no equity, then the second mortgage might be able to have its lien stripped off after successful completion of the Chapter 13 repayment plan. This can drastically alter how the debt is managed and may ease financial burden on qualifying homeowners. Lien stripping, however, is not an option for everyone and the exact valuation of your home, mortgage balances and bankruptcy laws that apply must be evaluated carefully. A seasoned chapter 13 bankruptcy attorney may review your situation, go over the possible benefits and disadvantages, and assist you in deciding whether Chapter 13 might offer a workable solution for safeguarding your residence and gaining significant debt relief.
