Strip-Offs and Cram Downs

Home Owners

Many homeowners in Cumberland and York counties are in a difficult situation in which their homes are worth much less than what they paid and they’re struggling to make payments on two mortgages. If you are in this situation, there are options you may be unaware of that could give you an opportunity to keep your home, including “strip-offs” and “cramdowns.”

You could file Chapter 7 bankruptcy to discharge some of your other debts, but you will still have to pay your home mortgages. Another increasingly popular option is filing for Chapter 13 bankruptcy. Chapter 13 may give you the option of stripping off your second mortgage.

A candidate for a mortgage strip-off must:

  • File for Chapter 13 bankruptcy
  • Have two mortgages
  • Have a second mortgage that is fully unsecured

There are other rules and exceptions for a Chapter 13 strip-off. To find out which option is best for you and your family to defend against foreclosure — whether within or outside the bankruptcy process — contact our experienced bankruptcy attorneys.

Car Owners

A cramdown is a court-ordered reduction of the balance of a vehicle loan. It has become a popular tool for Pennsylvanians with “upside-down car loans” — when the owner owes more money in vehicle payments than what the automobile is worth.

Chapter 13 bankruptcy has a specific provision that allows for qualifying car owners to “cram down” the debt amount on the outstanding loan payments to the present fair market value of the vehicle. Chapter 13 bankruptcy will create a reasonable repayment plan for the vehicle owner to follow in repayment of the fair market value of the automobile, but the owner will no longer have to make payments exceeding the car’s value.

Discuss Your Options With an Experienced Cumberland County Bankruptcy Attorney

At Dethlefs, Pykosh & Murphy Law, we present our clients with all their bankruptcy-related options so they can make informed decisions that are best for them and their families. For your convenience, our bankruptcy law firm holds offices in both York and Cumberland counties and proudly serves clients in Dauphin County. We also have an office in Chambersburg.

If you would like to explore options available to burdened property owners through Chapter 13 bankruptcy, contact Dethlefs, Pykosh & Murphy Law​ to arrange a free initial consultation with one of our Pennsylvania mortgage modification lawyers.

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