The real estate market in Dallas is doing rather well, but the rising price of homes is leveling off according to The Dallas Morning News. Still, some North Texans may still be feeling the pinch from the pre-market crash days before 2008 when they were able to obtain second or even third mortgages on their homes before home values plummeted, leaving them underwater. If you have more than one mortgage on your house, and your property is worth less than what you owe on your first mortgage, Chapter 13 Dallas TX may be the answer you’re looking for. In some situations, filing for Chapter 13 bankruptcy can help you get rid of the second and third mortgages on your house and allow you to recapture some of that equity.
Chapter 13 Dallas TX: Lien Stripping
Chapter 13 bankruptcy is a way for individuals and married couples to reorganize their debt and pay some of it back over time. Chapter 13 is particularly helpful for homeowners, as you can use it to catch up on your mortgage if you’re behind and stop foreclosure in its tracks. Certain other types of debts, like credit card debt and medical bills, get paid pennies on the dollar and the rest is wiped out by the bankruptcy discharge. These debts are called “general unsecured debts,” but a mortgage is a secured debt that must be repaid…unless you can strip it off. Another useful thing you can do in a Chapter 13 is something called a “lien strip”: you can ask the court that a second mortgage be “stripped” from your property and paid pennies on the dollar, just like a credit card debt. If you complete your Chapter 13 and obtain a bankruptcy discharge, that second mortgage is gone. However, there are requirements for obtaining a lien strip:
- You must file a Chapter 13. You cannot strip liens in Chapter 7. That means you must be able to afford a repayment plan.
- You must have more than one mortgage. You can only strip second and third mortgages; you cannot get rid of your first mortgage unless you give up your house or pay it off.
- Your property must be worth less than the balance due on the first mortgage.
Any homeowners with multiple mortgages who are considering filing a Chapter 13 Dallas TX should consult with an experienced bankruptcy attorney to determine whether lien stripping is an option for them. Call attorney William Kunofsky for a free consultation at (214) 369-1040, or fill out the form at debtfighters.com/contact-us/, and we’ll reach out to you.
Chapter 13 Dallas TX
Bankruptcy Lawyer Dallas TX
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