Strip Second Mortgages With Chapter 13 Bankruptcy
Many New Jersey homes and business properties are underwater meaning they are worth less than the mortgages that have been taken out against them. In these cases, the property owners may have a good reason to file Chapter 13 bankruptcy. That reason is called “lien stripping.”
At the law offices of Oliver & Legg, we offer a free initial consultation to discuss lien stripping and how it works. Call 732-988-1500 to talk to a lawyer in Toms River and Neptune City.
What Is Lien Stripping?
If you have taken out a second or third mortgage on your home, filing Chapter 13 bankruptcy will allow you to strip the lien from that debt. Once the lien has been stripped, the second or third mortgage becomes an unsecured debt similar to a credit card bill, which is not backed by property.
In a Chapter 13 bankruptcy repayment plan, unsecured debts do not have to be repaid in full. In fact, most of our clients do not have to pay back any of their unsecured debts.
Lien Stripping and Commercial Property
If you own commercial real estate such as a rental property, you can strip your mortgage down to the present value of the home. For example, if you paid $800,000 for a rental property that is currently worth $600,000, you may be able to strip $200,000 from your mortgage and turn it into an unsecured debt.
You Can Get Out From Under Mortgage Debt
Our attorneys are ready to answer your questions about lien stripping. Evening and Saturday appointments are available. Call local: 732-988-1500 or fill out our contact form to make a free appointment today.