Lynch Law Offices, P.C.
Free Initial Consultations
Toll Free: 800-491-7493
Menu Contact

A Family Approach To The Law

Don't let a default on a second mortgage result in foreclosure

The ability to obtain a second mortgage on one's home can be both a blessing and a curse. It can offer a person money when needed, but it can also put a big strain on one's financial situation. Illinois residents who fail to make their payments on their second mortgages could end up losing their homes to foreclosure, even if they are making their original mortgage payments.

Thankfully, before things get that bad and one's house is forced into foreclosure, it may be possible to strip the second mortgage by pursing a Chapter 13 bankruptcy filing. How does this work? Is the loan immediately discharged?

The basics of lien stripping are as follows. If a home is lacking in equity, the second mortgage is considered an unsecured debt. As an unsecured debt, it is eligible for bankruptcy discharge.

With Chapter 13 bankruptcy filings, debt discharge does not happen until after the repayment plan has been successfully completed. Depending on one's situation, that could be three to five years. If the terms of the repayment plan have been met successfully, then one will be released from his or her obligation to pay any remaining unsecured debts that were included in the bankruptcy petition.

Getting a second mortgage stripped can be a challenge. This type of request is one that creditors are likely to contest. However, with the assistance of a bankruptcy law attorney, Illinois residents who are at risk of losing their homes to foreclosure due to the inability to pay their second mortgages may seek bankruptcy protections in order find some financial relief and have the ability to keep their homes.

Source: homeguides.sfgate.com, "How to Strip Away a Second Mortgage Through a Bankruptcy", Accessed on July 14, 2017

No Comments

Leave a comment
Comment Information

Contact Any Of Our Five Convenient Illinois Locations

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Email Us For A Response
Toll Free: 800-491-7493
Fax: 888-691-8337

Lynch Law Offices, P.C.
1011 Warrenville Road
Suite 150
Lisle, IL 60532

Toll Free: 800-491-7493
Fax: 888-691-8337
Map & Directions

Available to meet throughout Will and DuPont Counties