When a person has multiple mortgages on a single home, they may be able to have these mortgages cut down to a more manageable status during Chapter 13 bankruptcy. In a process known as stripping a mortgage, a debtor can better handle these debts and may even be able to discharge them by the end of the bankruptcy case.
If you are considering bankruptcy in response to an overwhelming debt situation, we can help you to determine whether this course of action is right for you. Contact the Birmingham bankruptcy lawyers of [firm-name], at [phone-number] to discuss what options may be available to you.
When a person strips off of a mortgage, they reduce that mortgage’s legal status to being an unsecured loan. While mortgages are directly tied to a home’s equity, a stripped mortgage is treated like an unconnected loan that may be ultimately discharged when the bankruptcy process is complete.
In order to do this, a debtor needs to ensure that the following conditions are met:
As long as these are the facts of the case, a debtor may be able to strip these additional loans in Chapter 13 bankruptcy. This may allow for debt discharges on those loans when the repayment plan is finished.
Facing Chapter 13 bankruptcy alone can be both a daunting and frustrating task. For help in this challenging time contact the Birmingham bankruptcy attorneys of [firm-name], by calling [phone-number] today.