Does difference in homes value vs. the mortgage count as an unsecured debt when filing for Chap 13? 18 Answers as of June 09, 2013

My home value is 200K under mortgage loan, does difference count as unsecured debt or secured debt when filing for Chap 13?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Yes.
Answer Applies to: Washington
Replied: 6/9/2013
Heupel Law
Heupel Law | Kevin Heupel
Yes, if your mortgage is higher than the value of your home, that difference counts as unsecured debt. For example, if your mortgage is $225,000, then $25,000 of that mortgage counts as unsecured debt.
Answer Applies to: Colorado
Replied: 8/10/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Well the case law is not clear on that. Most courts treat that debt as "secured" because it can not be striped off.
Answer Applies to: California
Replied: 8/1/2011
Eric J. Benzer, Attorney at Law
Eric J. Benzer, Attorney at Law | Eric Benzer
Hire attorney
Answer Applies to: Maryland
Replied: 7/30/2011
Colorado Legal Solutions
Colorado Legal Solutions | Stephen Harkess
Yes, the amount of debt in excess of your home's value is generally considered unsecured debt. This can have an effect on your ability to file a qualifying Chapter 13 plan. You need to talk with an experienced bankruptcy attorney to find the best way to address your debt.
Answer Applies to: Colorado
Replied: 7/29/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    There is no clear answer to that question since different bankruptcy courts, and even different judges in the same judicial district, may have different opinions on the matter. You need to retain a local attorney familiar with how the local bankruptcy court has ruled on that issue. Since the mortgage is a secured debt (even if there is no value to support the total amount of the lien), some courts consider the mortgage debt a secured debt for purposes of Chapter 13 eligibility while other courts have held to the contrary, particularly with regard to fully secured second mortgages that can be stripped. Even if the Trustee does not object, the secured creditor might bring up the issue of your eligibility for Chapter 13 if your total secured debt amount exceeds the maximum for Chapter 13 eligibility. Again, get an attorney in your area to give you a reliable opinion.
    Answer Applies to: California
    Replied: 7/30/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    A loan secured by real estate is a secured, not unsecured loan even if the value is below the mortgage loan.
    Answer Applies to: California
    Replied: 7/29/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    If there is one mortgage, usually no (but we lack the information and numbers to answer). If there are multiple mortgages, maybe. Discuss this with your lawyer.
    Answer Applies to: Georgia
    Replied: 7/29/2011
    Glen A. Kurtis, P.C.
    Glen A. Kurtis, P.C. | Glen A. Kurtis
    I would need more information to answer this question more completely. If there are 2 loans on the house and there is no equity (including any exemptions) the second loan can sometimes be discharged in a chapter 13 bankruptcy as it would be wholly unsecured.
    Answer Applies to: New York
    Replied: 7/29/2011
    Lewis Adams and Associates
    Lewis Adams and Associates | Lewis P. Adams
    The difference between the home value and the mortgage is irrelevant in a Chapter 13 case, unless there is a second mortgage that has no equity to attach to. If the first mortgage exceeds the value of the property, the second mortgage lien can be removed in a Chapter 13. If you have only one mortgage, the entire mortgage remains in place, regardless of the value of the home.
    Answer Applies to: Utah
    Replied: 7/29/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    A house is secured. Part of it may be unsecured if it's underwater.
    Answer Applies to: Virginia
    Replied: 7/29/2011
    Law Offices of Daniel Moulton
    Law Offices of Daniel Moulton | Daniel Moulton
    I don't understand the question.
    Answer Applies to: Illinois
    Replied: 7/29/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    If the debt is solely a first mortgage then the fact it is underwater makes no difference the whole thing is still secured. If there is a second mortgage and both it and a part of the first mortgage are underwater, then the second may be converted to unsecured debt by a process we call "lien stripping." You need to discuss this with a bankruptcy attorney.
    Answer Applies to: California
    Replied: 7/29/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Talk to a bankruptcy attorney
    Answer Applies to: California
    Replied: 7/29/2011
    Grasso Law Group
    Grasso Law Group | Charles Grasso, Esq.
    Generally speaking, the first mortgage on your home, even if the home is worth less than you owe, is considered a secured debt for the purposes of determining Chapter 13 eligibility (i.e. whether or not you fit within the secured and unsecured limits for Chapter 13).
    Answer Applies to: California
    Replied: 7/29/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    It can if its a second mortgage.
    Answer Applies to: California
    Replied: 7/29/2011
Click to View More Answers:
12 3 Free Legal QuestionsConnect with a local attorney