If you have two mortgages on your home and the home is worth less than the first mortgage then the second mortgages can be stripped off in a Chapter 13 Bankruptcy. For example, lets say that our home is worth $200,000 and has a first mortgage of $210,000 and a second mortgage of $70,000. Because the home is worth less than the first mortgage ($200,000 < $210,000) we can strip off the second mortgage. That means that you only have to pay the first mortgage to keep the home. The same principles apply when there are more than two mortgages or liens on a home. This housing market provides many opportunities to strip loans from depreciated homes.

Posted in: Frequently Asked Bankruptcy Questions