Real estate values have been steadily dropping over the past 4 to 5 years. This economic crisis has resulted in many homes being worth less than what is owed on the mortgages. For some homeowners, this can be an opportunity to eliminate a second mortgage through a Fort Lauderdale Chapter 13 bankruptcy filing. One of the most common questions I am asked as a South Broward bankruptcy attorney is: "How do I get rid of my second mortgage?"
In order to eliminate a second mortgage through a Chapter 13 bankruptcy, you must owe more on your first mortgage than what your house is worth. That is not a difficult feat to accomplish in today's depressed real estate market. If you owe more on your first mortgage than what your house is worth, then you can ask the bankruptcy court to make a judicial determination that your second mortgage is not secured by your home since there is no equity "securing" the second mortgage.
Once that determination is made, then your second mortgage becomes an unsecured debt and moves over to the pile of unsecured creditors hoping to get some money from your monthly payments to the court. When you are done making your plan payments, any unsecured debts that didn't get paid in full are discharged (wiped out) by the court.
Although I've tried to explain the process in a simple matter, it is not something that you should try on your own.
Hiring a Fort Lauderdale bankruptcy lawyer is the best way to handle a Chapter 13 bankruptcy. There are many legal nuances that can backfire on you if you do not know the law in this area and are not familiar with how to prepare a Chapter 13 plan or strip off a second mortgage.
I am happy to discuss how a Broward Chapter 13 bankruptcy proceeding can help you stay in your home and reduce the principle that you owe by stripping off your second mortgage. Call or email today and schedule a free consultation. The office is conveniently located in Davie, close to Pembroke Pines, Miramar, Fort Lauderdale and Hollywood.
