Florence Lien Stripping Lawyer

When people take out loans and use their homes as collateral, the bank will put a lien on the home until the loan is satisfied. The lien allows the bank to seek the sale of the home to recover the money it is owed if the loan is not repaid. For people who are struggling to make their mortgage payments, trying to keep up with obligations for other loans can be nearly impossible.

In some instances, it may be possible to eliminate second or third mortgages through a process called lien stripping. As part of a Chapter 13 bankruptcy, liens for other loans can be removed if the fair market value of the home is less than the amount owed on the primary mortgage. If there is not enough equity in the home to secure the first mortgage, there is surely not enough to secure a second or third. At the law office of attorney L. Craig Kendrick, we will help you take steps to remove all eligible liens from your property.

How Lien Stripping Can Eliminate Second And Third Mortgages

For the sake of illustration, let's assume that the primary mortgage on your home has a balance of $150,000. Over the years, you took out a second mortgage of $40,000 to make improvements to the home and a third mortgage of $25,000 to pay off credit card bills.

During the years following the real estate crash of 2008, the value of your home dropped and has recovered to a current value of $140,000. Because your house is not worth the amount you owe on the primary mortgage, your second and third mortgages are no longer secured and can be reclassified as unsecured debt in a Chapter 13 bankruptcy — placing them in the same category as credit card debt or a medical bill.

The reclassification of the debts as unsecured will result in the liens being removed from your home, and once you complete your court-approved repayment plan, you will have no further responsibility for repaying the second and third mortgages.

Avoiding Judgment Liens On Your Home

If a creditor took you to court to collect a debt and won, it is likely that a judgment lien has been placed on your home. If you were to ever attempt to sell the property, the lien would need to be satisfied before the sale could be completed. Judgment liens can be avoided if the amount of the lien impairs the homestead exemption on your home. Judgment liens can be avoided in part or in whole, depending on the amount of the lien and the value of your home. We will work to avoid the maximum possible level of the lien in your bankruptcy proceeding.

Speak With Our Kentucky Bankruptcy Lawyer About Your Lien Stripping Needs

Please contact our office in Florence to discuss your debt relief needs with Mr. Kendrick. You can reach us by phone at 859-795-4407, toll free at 888-856-8043 or via email to get started.

We are a Debt Relief Agency. We help people file for Bankruptcy relief under the Bankruptcy Code.