Removal of a 2nd Mortgage Through Chapter 13 Bankruptcy

This fascinating thrill ride is filled with all the twists and turns of exciting information, so be sure to hold on for this bumpy ride!

Chapter 13 Bankruptcy offers an important, and regularly strange, option to clients who have residential real estate mortgages. Namely, removing a trainee lien frame or "2nd" from your debt. because the value of real estate has decreased, a mutual grievance I gather is, "I cannot judge I am paying more than my house is actually worth."

If you purchased a home in the ancient three to four years and financed with 80/20 mortgages, or if you refinanced your home and took out a second mortgage, odds are you can completely delete that second mortgage and other trainee liens from your home.

picture...file a chapter 13 Bankruptcy to eliminate all your credit card debt, decrease your car payments, treatment the back payments on your first mortgage and now, fully delete your second mortgage.

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In addition, if your house value bounces back, that equity is yours to keep.

It is important to recognize that the deduction of a 2nd mortgage is unfilled in a Chapter 13 bankruptcy only. The paradigm nominee for this practice has a 2nd mortgage on a home that is no longer appraised at or above the amount of the 1st mortgage. It is crucial to find comps for the chattels and an appraisal to found your the just market value of the home.

If the just market value workings, a gesture to get court liking will need to be filed. The mortgage company may differ this gesture. This will then demand an evidentiary gathering and perhaps an enemy grievance. If the court decides that the just market value of the home is below what is owed on the first mortgage, the second mortgage is "stripped" from the home and the debt associated with the second mortgage is made an unsetreatmentd debt (essentially being treated like credit card debt). Typically, in a Chapter 13 bankruptcy, a small percentage of the unsetreatmentd debt is paid, if at all.

Once the gesture is approved, you will need to make all table payments (over a 3 to 5 year period) and find your discharge. Once the debts are discharged, the second mortgage is completely spent.

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Learn More:Author: Jeff Raford
http://jeffraford-financebankruptcy.blogspot.com/