How To Remove A Second Mortgage
In better economic times, it was common for lenders to encourage consumers to take out a second mortgage to meet other financial obligations. As people have lost their jobs and the real estate market has declined, however, the high payments associated with those second mortgages are leading to high rates of default.
At Minion & Sherman, we help people remove second mortgages through bankruptcy when their debt burdens become unmanageable. With more than 40 years of combined experience, we thoroughly understand this complex area of law and are ready to help you understand how bankruptcy can give you the debt relief you need.
To arrange a free consultation with our experienced lawyers regarding removing second mortgages in Essex County, New Jersey, please call 973-559-5791 or toll free 866-915-1839. You can also contact our law firm online. Evening and weekend appointments available.
Chapter 13 Bankruptcy Can Remove A Second Mortgage
If your home is “underwater,” meaning that the value of your home is less than the remaining balance on your mortgage, it is possible to remove the second mortgage on your home using Chapter 13 bankruptcy. This process is called lien stripping. When your first mortgage is “underwater,” Chapter 13 bankruptcy treats any additional mortgages as unsecured debt. That means:
- Your second mortgage debt becomes part of your court-approved payment plan.
- Your payments under the plan are applied to your first mortgage because that is secured debt.
- The interest rate on your second mortgage is reduced to zero percent.
- When the three- to five-year payment period is over, most of your unsecured debt, including the second mortgage, gets eliminated.
Stripping a second mortgage cannot be done in all cases. If it is allowed, it usually requires an appraisal of the house and an extra hearing. Our experienced attorneys will be by your side throughout the process and explain everything to you in plain English.
Contact Our Firm To Learn More About Lien Stripping
If you have questions about second mortgages or any other home foreclosure issue, we are ready to give you answers. For a free consultation, call 973-559-5791 or toll free 866-915-1839. You can also contact our law firm online. Evening and weekend appointments are available. We serve clients in Essex County, Passaic County and Morris County.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.