Having multiple mortgages can be financially stifling for homeowners, especially if there are other debts on the table, such as student loans, auto loans, and credit cards. Paying down multiple large debts at once can eat up a large portion of your monthly income and make it nearly impossible to afford much else. If you find that your second mortgage puts you in a financial unbearable situation, bankruptcy may be a viable option.
However, before declaring bankruptcy or filing under any chapter, make sure it is truly your best option by talking to a Harrisburg bankruptcy lawyer. If you file bankruptcy without consulting an experienced legal professional, it could have dire consequences for years to come. (You may even come to find out that you never needed to declare bankruptcy at all!) If you are considering bankruptcy as a means of shedding that second mortgage, speak with a member of our legal team at Dethlefs Pykosh & Murphy Law today by calling (717) 975-9446.
Getting Rid of Additional Mortgages in Chapter 13 Bankruptcy
If your primary mortgage is greater than your home’s actual value, you may be able to get rid of additional mortgages. This is known as lien stripping. Your lien is stripped or removed from your property when a judge turns your second mortgages (and your third, if applicable) to unsecured debts. This places your additional mortgages into the same category as credit card debts, student loans, medical or hospital bills, and other debts incurred without any physical collateral. This allows the court to dismiss additional mortgages once your bankruptcy is finalized.
If the court decides to dismiss your additional mortgages, you will no longer be required to make payments. However, you will likely have to pay a relatively small portion of it back as part of your Chapter 13 repayment plan. Once your payment plan is complete, you will not have to pay any of the remaining balance, and the leftover amount from your additional mortgages will be discharged.
Getting Rid of Additional Mortgages in Chapter 7 Bankruptcy
In Pennsylvania, you can only remove second and third mortgages by filing Chapter 13 bankruptcy. However, don’t move forward with filing under Chapter 13, Chapter 7, or any other chapter until you have consulted with a bankruptcy attorney to assess your options.
Let us Lend a Hand—Speak with a Harrisburg Bankruptcy Lawyer Today
If you are overwhelmed by debts and massive monthly payments, we can help. Our legal team at Dethlefs, Pykosh & Murphy Law has helped many people like you get out from under heavy financial burdens, create a plan for the future, and get back on their feet. We can assist you in working toward a repayment plan that suits your unique needs, in order to help you start fresh and take back control of your finances.