Remove Second Mortgage from your Home
Some of the major benefits of a Chapter 13 Bankruptcy (not available in a Chapter 7 Bankruptcy) are:
- Remove the Second Mortgage from your home and investment property.
- Reduce the principal balance owed on mortgage(s) for multi-family homes and investment properties.
If you reside in Massachusetts and you are considering filing for bankruptcy in the Bristol County, Plymouth County, Barnstable County or Norfolk County areas of Massachusetts, please feel free to call Attorney Anthony Bucacci and Attorney Robert Simonian with any specific questions you may have regarding bankruptcy.
1. REMOVING SECOND MORTGAGES:
In order to remove a second mortgage from you home you have to show that the value of the property is worth less than the balance owed on the first mortgage. For example, suppose your home or investment property is worth $190,000.00 and you owe $200,000.00 on the first mortgage and $50,000.00 on the second mortgage. In this example you could remove the second mortgage in a Chapter 13 Bankruptcy by treating the second mortgage as an unsecured loan and paying a percentage (usually a very small percentage) over a 3 to 5 year period. Very often the amount paid is actually less than the original monthly second mortgage payment.
In essence, most people no longer have to pay the second mortgage and make one smaller payment to the bankruptcy court for 3 to 5 years and, once the Chapter 13 Bankruptcy is completed, the second mortgage is discharged and removed. This is a very useful tool and a way to "level the playing field", by bringing the amount owed on your home closer to its actual value. This can be done regardless of an impending foreclosure. We can stop the foreclosure. It is important to consult with an experienced bankruptcy lawyer before you decide to file a chapter 13 bankruptcy.
2. REDUCING THE BALANCE OWED ON MORTGAGE(S) FOR MULTI-FAMILY HOMES AND INVESTMENT PROPERTIES:
Legally it is possible to reduce a mortgage balance amount in a chapter 13 bankruptcy. Basically, the bankruptcy court splits the outstanding mortgage balance owed into 2 parts. The first part is the amount of the mortgage equal to the current value of the home and the second part is the amount in excess of the value of the home. The amount equal to the value of the home is treated as a secured claim and must be paid over a 3 to 5 year period and the excess is treated as an unsecured claim and is paid at a percentage over a 3 to 5 year period. At the end of the 3 to 5 year period the secured balance of the mortgage is reduced to the value of the home, paid in full over the 3 to 5 year period and the excess is discharged and removed. For example, suppose you own a multi-family home or investment property with a present value of $120,000.00 and the mortgage balance is $200,000.00. In this example your mortgage balance would be reduced to $120,000.00, paid over a 3 to 5 year period and the $80,000.00 balance would be discharged. You would now own your home free and clear of any mortgage at the end of the 3 to 5 year chapter 13 bankruptcy plan. This is a very useful and powerful tool. It is important to consult with an experienced bankruptcy lawyer before you decide to file a Chapter 13 bankruptcy.
Chapter 13 bankruptcy law is very complicated and each individual Chapter 13 bankruptcy case can vary greatly from the next. It is very important that you speak with a competent bankruptcy attorney and experienced bankruptcy lawyer before making any decisions. Bankruptcy has to be in your best interest and you should receive a benefit from filing bankruptcy. Please call Attorney Anthony Bucacci or Attorney Robert Simonian for a free, no obligation consultation.
Attorneys Anthony Bucacci and Robert Simonian are Massachusetts bankruptcy attorneys helping people file bankruptcy in all of Massachusetts, including Fall River, New Bedford, Freetown, Seekonk, Swansea, Somerset, Westport, North Dartmouth, South Dartmouth, Assonet, Fairhaven, Mattapoisett, Acushnet, Wareham, Taunton, Middleboro, Lakeville, Bedford, Dighton, North Dighton, Raynham, Norton, Attleboro and North Attleboro Massachusetts.