It is not uncommon for individuals that have run into financial difficulties to take a second mortgage out on their house to help rectify their financial situation. Quite often this doesn’t work and only prolongs the step of entering into a bankruptcy action as a form of debt relief.
In some cases homeowners might be able to eliminate the second mortgage or a home equity line of credit during their bankruptcy action. This is called lean stripping. There are specific criteria that have to be met in order to have the mortgage removed. What must happen is that the value of the home must have been reduced to the point where it is no longer secured by any equity that has been built up in the home.
In order to prove this an appraisal must show the fair market value of the house is so low that if you were to sell the house you would not get enough money out of it to be able to pay the second mortgage. On the other hand, if it turns out that even a small section of the equity you have is security on the second mortgage you will not be able to have this mortgage removed in bankruptcy. Bankruptcy no matter whether it is a Chapter 13 or Chapter 7 can be quite complex and can be a little overwhelming. Using the services of a qualified bankruptcy attorney in Texas will make this process much easier for you to go through as well as understand exactly where you are at.
Contact us today to discuss your unique situation and let us resolve your debt issues.
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