Intro to Chapter 13, Loan Mods and Lien Stripping

Here is a post I did 3 years ago that may be of interest to homeowners considering Chapter 13. This is an introduction to Chapter 13.

One significant change since I did this post is that the Bankruptcy Courts in the Southern and Eastern Districts (covering most of lower NY State) are now also offering loan modifications as part of the process of Chapter 13.

Also, for those with 2d mortgages that are completely underwater (where you owe more on the first mortgage than the house is worth), it may also be possible to strip off the 2d mortgage lien in a Chapter 13 case and treat that debt as an unsecured debt (like a credit card) which in some cases means that you may only have to pay 10% of it and the other 90% would be wiped out or discharged. This may be particularly useful for those who did 80/20 financing a few years ago when the market was up.

My blog contains a lot of information about bankruptcy, loan mods and related items, all of which can be searched using the Find box on the right.