As I was drafting an adversary proceeding (lawsuit in bankruptcy) today it occurred to me that some people may not be aware of the power of Chapter 13 bankruptcy.
Did you know that sometimes we can strip (or erase) a second mortgage in Chapter 13 bankruptcy? You read me right! Sometimes we can actually erase a second mortgage in bankruptcy without paying any money to that creditor.
But how? Great question! The Bankruptcy Code allows debtors in Chapter 13 to erase a second mortgage if there is no equity above the first mortgage to secure it. This means that if a house is worth $100,000 and there is a first mortgage for $110,000 then we could erase the second mortgage.
Chapter 13 bankruptcy does amazing things for people every day. That is why it is so important to hire an experienced attorney who can help guide you through the bankruptcy process. If you are considering filing bankruptcy call the Law Office of Kimberly A. Sheek at 704-842-9776 for a free initial consultation.