Can I strip my second mortgage in a chapter 13 if my first mortgage exceeds the value of my home? 30 Answers as of June 07, 2013

My 1st mortgage exceeds the value of my home. Can I strip my second mortgage and treat it as unsecured? What statute do I cite?

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Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
Yes - you need an attorney.
Answer Applies to: Michigan
Replied: 6/3/2013
Heupel Law
Heupel Law | Kevin Heupel
Yes, you can remove a second mortgage if the value of the home is less than the balance of the first mortgage under section 506.
Answer Applies to: Colorado
Replied: 9/19/2011
Dan Wilson Bankruptcy
Dan Wilson Bankruptcy | Dan Wilson
No. Lien-stripping is only possible if your 2nd mortgage is completely unsecured.
Answer Applies to: Colorado
Replied: 9/12/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
A second lien, junior mortgage or other subordinate lien that is unsecured in terms of equity at the time of filing bankruptcy can be stripped. Stripping a lien must be done by motion.
Answer Applies to: Indiana
Replied: 9/9/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
Yes. Absolutely. This is one of the reasons why a chapter 13 works so well. Stripping the lien involves filing a motion with the court to value collateral and properly including this in your plan. I wouldn't try this on my own. You need to see an attorney about this.
Answer Applies to: California
Replied: 9/8/2011
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    Yes, you need to go to the court's website and get the motion to value. You will also need an appraiser's report and possibly hire an expert for the motion hearing. From the question, I take it that you don't know the law yourself that well. In that case, let me give you a piece of honest advice, over 90% of pro se chapter 13 cases get dismissed because debtors don't know what to do and the trustee won't care enough to walk you through the case, so they dismiss it. Find an attorney to help you.
    Answer Applies to: Florida
    Replied: 9/8/2011
    Braunstein Law, PC
    Braunstein Law, PC | Jacob Braunstein
    Generally, if the value of a home is less than the balance on the first mortgage, the second mortgage will be treated as wholly unsecured and can potentially be stripped in a Chapter 13. You will want to consult with an attorney regarding the exact procedures for lien stripping in your district.
    Answer Applies to: Oregon
    Replied: 9/7/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes you can do that. Some courts do it by motion and others by what is called an adversary proceeding. It is not about what case you cite. It is about the procedure. That is what is important.
    Answer Applies to: California
    Replied: 9/7/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    No. Not if it is your residence
    Answer Applies to: Michigan
    Replied: 9/7/2011
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    Yes it can be stripped and yes it will be treated as an unsecured. You should consult with an attonrey to discuss the facts of your case.
    Answer Applies to: Florida
    Replied: 9/7/2011
    D T Pham Associates, PLLC
    D T Pham Associates, PLLC | Duncan T Pham
    No.
    Answer Applies to: Texas
    Replied: 6/7/2013
    Bankruptcy Law Center
    Bankruptcy Law Center | Bill Zurinskas
    Applies to Colorado bankruptcy using Colorado exemptions only: Yes, you can strip a wholly unsecured 2nd deed of trust on your homestead in a chapter 13 bankruptcy. Get an appraisal or CMA of the value of the home, as well as a payoff statement from the first deed of trust holder, then file your motion at the time of filing your bankruptcy.
    Answer Applies to: Colorado
    Replied: 9/7/2011
    Holmes Law Offices
    Holmes Law Offices | Martin M. Holmes
    Yes. That is one of the major advantages of a Chapter 13. This can be a complicated process and should be handled by a competent attorney that has experience in Representing debtors. In some courts the process requires an adversary proceeding. In others the court allows the " strip off" through the plan confirmation process. And the debtor needs to be prepared with proof of the value of the property and amount owed on senior liens.
    Answer Applies to: Michigan
    Replied: 9/7/2011
    The Law Offices of Katie M. Stone
    The Law Offices of Katie M. Stone | Katie M. Stone
    Yes, if your home is valued less than what you owe on your first mortgage, you can strip the 2nd mortgage in a chapter 13 bankruptcy. After you file the chapter 13 bankruptcy, you file a motion to strip the 2nd lien. The court temporarily strips the 2nd lien and then if you complete your chapter 13 plan payments and receive your discharge, they will judicially remove the lien from your house so that it will no longer be there. A chapter 13 is a repayment plan bankruptcy and you need to make sure that it is the right chapter for you to file and that you have the income for you to complete the plan payments. A chapter 13 bankruptcy is very detailed and complex and I highly suggest that you speak to an attorney before you file or attempt to file it on your own. Some attorney's will allow you to pay their fees through your chapter 13 bankruptcy plan. I hope you found this answer useful.
    Answer Applies to: Florida
    Replied: 9/7/2011
    Mauritz Van Niekerk, Attorneys at Law
    Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
    Yes you can.
    Answer Applies to: New York
    Replied: 6/7/2013
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Yes you can, and you should also be consulting with an experienced bankruptcy attorney, because this is not something for the layperson.
    Answer Applies to: California
    Replied: 9/7/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Yes, but it is complicated. You have to have a bankruptcy attorney to represent you in that.
    Answer Applies to: California
    Replied: 6/7/2013
    Law Office of Jackie Robert Geller
    Law Office of Jackie Robert Geller | Jackie Robert Geller
    Yes absolutely. But you should have an attorney handle that as you must plead very specific cases and statutes.
    Answer Applies to: California
    Replied: 6/7/2013
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    If you try to do it yourself, prepare to lose. Bankruptcy is NOT a do it yourself project and you are not going to succeed against the bank's trained lawyers. Conversely, a good lawyer will often win a lien strip easily, with proper preparation. There is no lien strip statute. The concept comes from court opinions and differs by district.
    Answer Applies to: Georgia
    Replied: 9/7/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Pursuant to section 506 a claim is secured only up to the value of the collateral securing the lien. So you can strip your second mortgage if your fist mortgage exceeds the value of your home.
    Answer Applies to: California
    Replied: 9/7/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    A condition of a junior-lien strip is that its senior-lien balance must exceed the value of the home. Pursuant to an Order granting a lien strip motion, and confirmation of the Chapter 13 Plan, the stripped lien would be treated in the plan as unsecured debt. Mere citation of a statute is insufficient; the motion and its noticing is involved and may need to conform heavily to local practices.
    Answer Applies to: California
    Replied: 9/7/2011
    The Northwest Debt Relief Law Firm
    The Northwest Debt Relief Law Firm | Thomas A McAvity
    Where a second mortgage is wholly unsecured, meaning the value of the home is less than what is owed on the first, the second can be avoided. In some jurisdictions this can be accomplished via motion and in other jurisdictions an actual adversary proceeding must be filed.
    Answer Applies to: Oregon
    Replied: 9/7/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    No. The second must be fully unsecured.
    Answer Applies to: Virginia
    Replied: 9/7/2011
    G. Anthony Yuthas & Assoc.
    G. Anthony Yuthas & Assoc. | Tony Yuthas
    If your first mortgage exceeds the value of your home you may consider a motion to strip. This requires an appraisal and documentation of the loan amounts. The second mortgage lender may object to this. If the court approves the property valuations submitted, your second mortgage can be discharged at the end of your chapter 13 bankruptcy period if all payments have been made and the case is discharged.
    Answer Applies to: Colorado
    Replied: 9/7/2011
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