Lien Stripping & Second Mortgage Solutions in Morristown
Serving Across Morris County and the Surrounding Area
The real estate boom was marked by hope and seemingly endless growth. Encouraged by ever-soaring housing prices and mortgages that were incredibly easy to obtain, many homeowners found themselves in homes that were more expensive than they'd intended.
Then, when the market began to fail and these homes dropped in value, the same homeowners found themselves paying more than their homes were worth. They often struggled to manage multiple mortgages or home equity lines of credit. Many worried about the threat of foreclosure. Others intentionally walked away from their homes, fully aware of the potential consequences—but not knowing where else to turn.
If you have a lien on your property, a second mortgage, or payments that are simply too high to meet, turn to Ast & Schmidt, P.C. With a history of helping homeowners reach financial solutions, we are dedicated to pursuing the best possible results for people who owe more than their homes are worth.
Call our firm at (973) 363-2260 to learn more about our lien and second mortgage services in Morris County today.
How Bankruptcy Can Resolve Your Homeownership Crisis
Depending on your situation, we may be able to help you resolve your debt through Chapter 7 or Chapter 13 bankruptcy proceedings:
- Chapter 7 bankruptcy: Chapter 7 looks to discharge your debt, including your liability on your mortgage note and home equity lines of credit. As a relatively quick proceeding, many filers complete the process in as little as four months. This choice, however, does not provide methods of resolving an underwater mortgage. It eliminates personal liability so the mortgage company cannot pursue the deficiency claim if you decide to let the home go.
- Chapter 13 bankruptcy: Chapter 13 allows filers to set up a repayment plan to cover some or all of their debt. The payment plan generally lasts 3-5 years. In Chapter 13, the court may remove a second mortgage if the homeowner is underwater. This is called “lien stripping,” and it is a tremendous advantage for people who are struggling to keep their homes.
If your property does not have enough equity after deducting the primary mortgage from its current market value, you may be able to strip the lien.
For example, consider a homeowner with a property worth about $200,000. The borrower has two mortgages on it. The first mortgage balance is $210,000, and the second mortgage balance is $50,000. While the first mortgage lender is secured by the value of the collateral (the value of the house), the second lender has nothing to secure its loan. Because it’s an unsecured loan, the court may strip the lien. In this case, you would not have to make regular monthly payments to this lender, and, once bankruptcy discharges your debt, you would not have to pay the $50,000 lien when the house is sold.
Contact Our Morristown Law Firm to Get Started
You may still have several questions about bankruptcy and your mortgage(s). How much will it cost to file? Is it right for your situation? Will you be able to keep all your assets? The answers to these questions depend on your unique circumstances, and our team at Ast & Schmidt, P.C. is more than happy to analyze your situation and provide fully personalized recommendations.