Chapter 13 Bankruptcy Can Wipe Out a 2nd Mortgage
16 Aug 2010
According to a recent story in the Orlando Sentinel, Orlando home values continue to decline. As an Orlando bankruptcy lawyer, I have witnessed this first hand. Now, I know you didn’t need the Sentinel to tell you that, but I digress.
Unfortunately, the same can be said for real estate in almost all areas of Florida. It seems everyone is underwater on their homes. In the past few years, many of my Orlando bankruptcy clients have benefited from the ability, in a Chapter 13 case, for their Orlando bankruptcy lawyer to file a motion in their case which allows them to completely wipe out the balance owed on a 2nd mortgage.
To be eligible for this type of relief, you must be able show, through an appraisal of your property, that the value of the property is less than what is owed on the 1st mortgage. Here in Orlando, a recent opinion was issued by a Bankruptcy Judge that says you can only strip off a 2nd mortgage in a Chapter 13 bankruptcy case. This type of relief is not available in Chapter 7 cases. Also, you must successfully complete your Chapter 13 payment plan, and receive your Discharge Order from the Court before the mortgage will be totally gone.
Hopefully we will soon start to see the end of this seemingly unending decline in home values in the Orlando area. When that happens, and after my clients have successfully completed their Chapter 13 plan, stripping off the 2nd mortgage, they will be that much closer to having equity in their homes again!
With the help of an experienced Orlando bankruptcy lawyer, my clients can achieve this goal, as well as other goals such as eliminating credit card debt and saving money on car loans, all by filing Chapter 13 bankruptcy.