So what is lien stripping in bankruptcy
and can you strip them in chapter 7 or chapter 13 cases? Watch our next video
and find out so stripping mortgage lanes is an
amazing feature of bankruptcy and we have so many clients that we see get a
really great result from this especially when we had the real estate crash and we
had so many people that were coming to us there were underwater on their
mortgages that had these second sometimes third mortgage loans so first
thing about lien stripping you could only strip a mortgage lien in a chapter
13 case there was a very very very brief period where you could strip junior
mortgages in Chapter 7 cases however that is now gone it is not available you
can only remove a junior mortgage in a chapter 13 case so just make sure if
you’re filing a chapter 7 and you have junior mortgages you’re not going to be
able to strip those mortgages to just get that out out of your mind it’s not
gonna happen but if you’re in a chapter 13 case and your second mortgage is
completely underwater and I mean there’s no equity that’s touching that mortgage
you may be a great candidate to strip the lien and what that means is it is a
motion that is filed by your attorney there’ll be information about the
valuation of your house a lot of times you need to get an appraisal so you can
of course prove the value and then if it is granted your junior mortgage is going
to be converted into an unsecured debt and at the end of your bankruptcy case
remember you have to finish your bankruptcy case if your case gets
dismissed this is a valid but if you finish your chapter 13 bankruptcy case
it gets discharged then that second or third fourth mortgage is completely
wiped out and it is discharged there’s a couple of steps that it depends on what
district you’re in you want to make sure that you file that with the property
office wherever what county you’re in but the point is that junior lien is
removed we’ve had clients removed like one hundred and fifty thousand dollar
junior lien thirty thousand dollars two hundred thousand dollar junior liens so
is a very very powerful tool of course you know you also want to make sure that
if you’ve had prior bankruptcies that you’re even available
it’s even available for you to get a discharge so that’s something you want
to make sure when you meet with an attorney that they verify number one
that you’re eligible for a discharge and number two that you can be in what we
call a composition plan where you’re not repaying all of your unsecured debt back
because if you have to pay all of your debt back it’s not really going to help
you to strip the mortgage and then it’s still a debt you’re going to have to pay
back in full so that wouldn’t help you but if you are in a composition plan
definitely you want to talk to your attorney and see if your property is
eligible for lien strips if you have any questions about this video or any of the
information we’ve talked about today always feel free to contact us
information is below in our description box and we’re happy to answer any
questions