Lien stripping is a very useful tool for borrowers who need to eliminate a 2nd mortgage. Additionally, it allows for the opportunity to reduce a car loan down to the car’s current market value. Stripped liens will receive the same treatment as all your other unsecured debts (i.e. credit cards) in bankruptcy. These debts generally receive nothing or a small amount and get discharged at the completion of your bankruptcy. Further, after the discharge your lender for the stripped lien will be required to remove its lien from the collateral. For more information on how to eliminate a 2nd mortgage contact a bankruptcy lawyer in Tampa to schedule a consultation.
Eliminate a 2nd Mortgage with Lien Stripping
Chapter 7 may allow you to eliminate a 2nd mortgage with lien stripping. Lien stripping to eliminate a 2nd mortgage is not allowed in Chapter 7 where the lien is partially secured but may be permitted if the lien is wholly unsecured. For instance, if you own a home that is worth $200,000 but owe $250,000 on your first mortgage and $50,000 on a second mortgage, the second mortgage will be treated as an unsecured loan, but the entire balance of the first mortgage will still be classified as a secured loan. Thus, it is used as a tool only to eliminate a 2nd mortgage or Jr. lien.
Stripped liens will receive the same treatment as all your other unsecured debts (i.e. credit cards) in bankruptcy. See Bankruptcy law 11 US 506 These debts generally receive nothing or a small amount and get discharged at the completion of your bankruptcy. The specifics will vary based on the individual facts of each case, contact a bankruptcy law firm in Tampa for more information.
Lien Strip a Car Loan
Lien stripping can also be used to reduce the balance of a car loan. If the lien is stripped down to the market value, the remaining balance will be treated as an unsecured claim. Therefore, the debt would be subject to discharge. For example, if you owe $10,000 on but the vehicle is only worth $5,000, then $5,000 would be classified as a secured claim and the remaining $5,000 would be treated as an unsecured claim. To see if you qualify to eliminate a 2nd mortgage or strip a car loan, contact a Tampa bankruptcy lawyer. This is article is intended for general information only and not legal advice for any particular case.
Bankruptcy Attorney in Tampa
If you are having a difficult time meeting your financial obligations, Florida Law Advisers, P.A. may be able to help. Our bankruptcy attorneys in Tampa have years of experience helping people just like you to solve their financial problems. We understand these are very difficult times and we are here to help. In some cases, filing for bankruptcy may be a good solution, however, it is often not the only solution available. The right course of action will depend on the unique circumstances of each case. To see which options may be available to you, contact us to today to schedule a free consultation.