Yes, you can get rid of underwater mortgages and equity lines of credit when filing a Chapter 13 bankruptcy case. Unfortunately bankruptcy cannot permanently modify your first mortgage on your primary residence, but if your second or third mortgage is underwater we can help. Call us today toll free at 1-877-963-9543 to schedule a free consultation one of our attorneys. You will not be meeting with a paralegal or assistant.
- Chapter 13 Bankruptcy
- Save Your House From Foreclosure
- Lower Your Car Payment
- Payoff Taxes Without Interest or Penalties
- Unsecured Debts With No Interest
To get this relief a plan of reorganization is filed and a motion or adversary proceeding to value your home is also filed with the case. The motion requests the court to enter an order that your house is worth what it is worth at the time the case is filed. If your home is worth less than what you owe on the first mortgage, then any of the other mortgages you have are valueless and can be avoided when your plan of reorganization is completed. Yes, you must complete the plan to get the relief sought. This means making every payment of the plan. Most plans last from 36 to 60 months depending upon the circumstances.
Normally the only appearance in your case you will have to make is at the meeting of the creditors. This meeting is administered by the trustee’s office and also allows your creditors an opportunity to ask questions about the bankruptcy petition filed on your behalf. It usually last around 5 minutes once your case is called. Your first plan payment will be due the month after your case is filed. For example, if your case is filed in June 2011, your first plan payment will be due the following month, July 2011. July 2011 would be the first month of the proposed plan of reorganization.
If you believe filing a chapter 13 case to remove your underwater mortgages is possible you should obtain an appraisal of your home. In some cases this may not be necessary if your home is unfortunately clearly worth less than what is owed on your first mortgage. Once the motion to value is filed and served on the mortgage holder you are trying to get rid of the mortgage holder may oppose the motion and try and argue that your house is worth more than what is claimed in the motion to value. If an opposition is filed and no agreement can be worked out with the mortgage holder a hearing will have to be held and the judge assigned to your case will then hear evidence as to the value of your home. This is why an appraisal is sometimes very important.
