South Side Bankruptcy Attorney
Eliminating 2nd Mortgages via Bankruptcy
With our recent poor economy, many homeowners have lost a sizeable amount of equity in their homes. The South Side of Chicago is one of the areas which have suffered a large drop in property values across the United States. Many Illinois homeowners now find themselves upside down on their mortgages, owing more to their lender than their homes are worth. In the past few years loans across the nation were placed with an 80% first mortgage and a 20% 2nd mortgage (80/20). They were also Adjustable Rate Mortgage (ARM) loans, which adjusted the interest rate higher following a set period of time. If you obtained this type of a loan or refinanced your home and took a 2nd mortgage, you may now find yourself in a situation where you are having trouble making your payments. By utilizing the experience and skill of the bankruptcy attorneys at Glanzer & Associates, P.C. they can assist you with determining whether the option of eliminating your 2nd mortgage is possible and right for you.
Bankruptcy Lawyer Serving South Side
If the value of your home has fallen below the total outstanding balance of your first mortgage, it may be possible to eliminate or "strip off" your 2nd mortgage. For example, if you purchased a home for $400,000 with an 80/20 loan, you would have a first mortgage of $320,000 and a second mortgage of $80,000. If the value of your home now stands at $300,000 due to the economy and the plummeting home values, you may be able to rid yourself of the $80,000 second mortgage through a Chapter 13 bankruptcy filing.
The amount that you owe the 2nd mortgage company will be paid at the same rate as the rest of your unsecured debt, which is often at a fraction of the original balance! Eliminating 2
nd mortgages is just one of the many ways a Chapter 13 bankruptcy can help people get back on their feet and get a fresh start. Not all homeowners will be able to do this. If you meet with one of our highly trained legal staff, we can review your financial picture and help you to determine exactly what steps can be taken to assist you in this matter.
Where the value of the home has fallen below the total outstanding balance of the first mortgage, it is possible to “strip off” the second mortgage in Chapter 13 bankruptcy. (The debtor must qualify for a Chapter 13 repayment plan). A second mortgage can sometimes be converted into unsecured debt and could be discharged or classified as non-priority debt in the Chapter 13 plan. We recommend that you contact us today for your free initial consultation.
For advice on eliminating your 2nd mortgage,
contact a South Side bankruptcy lawyer
at Glanzer & Associates, P.C. today!
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