Eliminating a Second Mortgage in Bankruptcy
We have found that while most of our clients are vaguely aware of the concept of lien stripping, few understand how it may — or may not — apply in their cases.
Lien stripping is a process by which a second or third mortgage or home equity line of credit can be removed and completely discharged in a Chapter 13 bankruptcy. Lien stripping is particularly useful for clients whose first mortgage exceeds the appraised value of their home.
As a practice, lien stripping is relatively new to bankruptcy. Its use in Arizona has grown since the collapse of the housing market and the subsequent economic recession. We find it to be an invaluable tool in reducing or eliminating debt and in enabling our clients to create workable Chapter 13 debt repayment plans.
It is important to note that you must successfully complete a Chapter 13 plan for lien stripping to work. Otherwise, you may end up owing the full amount of any second or third mortgage or other debt secured by your home. That is one reason why it is so important to seek the guidance of an experienced bankruptcy attorney early in the process.
The attorneys of Clark Law Offices in Phoenix and Mesa have helped a great number of Arizona homeowners navigate the Chapter 13 bankruptcy process. We are committed to providing high-quality personal attention and customized solutions. Contact us today for a free, no obligation, no pressure consultation with an experienced bankruptcy lawyer.
Our offices are conveniently located in Phoenix, just south of the Biltmore, minutes from Hwy 51, and in downtown Mesa.
