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Monday December 18th 2017

Managing Mortgages During Your Filing For Bankruptcy

Bankruptcy attorney Benjamin Ginter runs the Law Offices of Benjamin J. Ginter in Cranford, New Jersey. In his opinion, lien stripping is a method where those who file for bankruptcy are ready to discharge their mortgages while still keeping their homes. He talks here about why you may must file for Chapter 13 and not Chapter 7.

Negotiating the bankruptcy minefield is additionally hazardous, and it can be always possible to make the inaccurate decision, from filing for the wrong chapter to missing a deadline. It truly is well worth hiring a certified and experienced bankruptcy lawyer to house things. With the intention to increase your probabilities of filing for bankruptcy successfully and make a new start for your life.

You can discharge your mortgage in a bankruptcy while still keeping your place. The process is named lien stripping. In most states, you can not strip a first mortgage for your home. However, you probably have a second or third mortgage for your house, and they’re completely unsecured, you may make an offer to the court to have those liens basically treated as unsecured and wiped out.



This can only be done through filing for Chapter 13 in place of Chapter 7 bankruptcy. Let’s take an example of this. If in case you have a house worth $300,000, with a first mortgage of $350,000 and a second mortgage of $50,000, based on those numbers, you are able to strip the second lien $50,000, or the second mortgage, because it’s completely unsecured.

In this example, the first mortgage basically encompasses the entire value of the house. And the second mortgage or the second lien, will never be attached to anything; it truly is unsecured and you may have that discharged.

Secured debt is a creditor’s claim it is secured by a lien of some type on your property, either by your agreement or disagreement. As an example, a mortgage is a secured claim or a finance agreement for an automobile.

If you do not continue making payments, the creditor could take back the property. A creditor can generally claim the property that secures the debt inside the event of bankruptcy. Unsecured debt will not be tied to any specific style of property; it usually is bills on a credit card, as an instance.

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