Is Your House Under Water? Eliminate Your Second Mortgage Payment in a Chapter 13 Bankruptcy
In Georgia, bankruptcy law allows a debtor who has two mortgages to get rid of the second mortgage in a Chapter 13 and classify the second mortgage as an unsecured debt in a situation where a debtor’s home has a value that is less than the amount of the first mortgage.
For example, if a debtor owns a home that has a fair market value of $100,000 and has a first mortgage in the amount of $110,000 and a second mortgage in the amount of $25,000, then the debtor can ask the court to get rid of the second mortgage lien on the property as part of his Chapter 13 reorganization plan.
If the court approves the request, then the second mortgage is classified as an unsecured debt, and the debtor does not have to pay the monthly second mortgage payment during the course of the Chapter 13 bankruptcy plan, which usually lasts between three and five years.
At the end of a successful Chapter 13 bankruptcy repayment plan, the bankruptcy court will issue an order discharging or wiping out all of the debtor’s debts, including the second mortgage debt. The bankruptcy court will also issue an order “stripping” the second mortgage lien. This lien stripping order should be filed with the real estate records in the county in which the property is located and serves to cancel the security deed that the second mortgage company held on the property.
Thus, upon the successful completion of the Chapter 13 case, the debtor will no longer owe the second mortgage company any money, nor will the second mortgage company have any rights with regard to the property. The theory behind this law allowing debtors to essentially eliminate the second mortgage payment is that, because the property has no equity, then the second mortgage company has no real security in the property to which the mortgage can attach. Call the Law Offices of Charles Clapp at 404.585.0040 or e-mail email@example.com to schedule a free consultation about your second mortgage debt.
Charles is absolutely a brilliant attorney! He is a critical thinker and determined problem solver. He is very accessible, even via text. If he is in court, his ability to multi-task, you can feel safe and secure in knowing he is handling any issues or concerns. I entrust him with my future, he is a uniquely talented attorney who always challenges himself to achieve the absolute best outcome for his clients.
I was very satisfied with Mr. Clapp services. He is a man of his word and did everything he told me he would. I would highly recommend him.
I came to Mr. Clapp by referral with a complicated case involving both personal and business debts that were out of control. Mr. Clapp evaluated the situation and gave me options that I was not even aware of. He knows his stuff, executed flawlessly, and I have been able to start over. I highly recommend Charles Clapp if you have debt or bankruptcy issues. Listen to his advice, he knows his stuff. I consulted with several other bankruptcy attorneys prior to retaining Mr. Clapp, and they did not have the same breadth of knowledge that Mr. Clapp brought to my case.
I selected Charles Clapp to handle my bankruptcy based on his already positive reviews and I am glad that I did! He was very accommodating to my schedule and made my negative life experience positive. I was actually very surprised how easy he made the process. Life happens and it’s great to be represented by someone that understand that!!! Stop your attorney search with Charles Clapp!!!