Bankruptcy may also allow you to cancel
your unsecured junior mortgages (lien strip).
Not exact matches
Chapter 13 is the only chapter that provides this; in order to «strip» a
junior lien, the chapter 13 debtor must prove that the
junior lien is completely
unsecured - that is, that the value of the home is less than the balance of the existing first
mortgage.
If the total amount owed to your first
mortgage is greater than fair market value of your property, you can eliminate the security interest to
junior lienholders and treat them as general
unsecured creditors in your bankruptcy plan (thereby possibly being able to pay them less than 100 %).