Attorneys Blog

Eliminate your Second Mortgage

Do you have a second mortgage that you are unable to pay? You may be able to eliminate the payment and pay it off through a Chapter 13 Plan in as little as three years. It sounds too good to be true, but because of the declining value of real estate it is possible. If your First mortgage is equal to or greater than the current value of your house, you can treat the second mortgage the same as you treat ordinary credit card debt. This is called a cram-down because you are forcing the Bank to accept less than they are due under your original agreement. Through your plan you make a small monthly payment to the Bankruptcy Trustee. The Trustee will in turn pay a percentage of your debts. Upon successful completion of your plan, your second mortgage is discharged along with your credit card and other unsecured debt.

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