A recent post on this blog talked about how Louisville, Kentucky, residents might want to explore the using a Chapter 13 bankruptcy to "strip off" liens from their property, such as a second or third mortgage they took out in exchange for a home equity loan.
Indeed, the stripping off strategy, provided a debtor is eligible and has the right circumstances, can save the debtor thousands of dollars in debt, even if they initially have to invest more in following through on their Chapter 13 repayment plan. The reason is that, after a successful strip off, the holder of a second or third mortgage can pursue neither the debtor nor seek to foreclose on the debtor's home after discharge.
However, this process has to be handled with care an utmost attention to detail. After all, most holders of second and third mortgages are not too eager to give up their status as a secured creditor, and they therefore may try to object to the technique.
At our law office, however, lien stripping is just one more tool in our box of techniques that, in the right circumstances and when allowed under law, we will use to help our clients lower their monthly payments during the Chapter 13 and, in the long term, come out in a better financial situation overall.
When we take on a Chapter 13 case, our goal is always to assess our client's circumstances and use the right strategies for our clients. In this respect, we are more than just people who help fill out complicated forms; we see ourselves as attorneys dedicated to guiding our clients out of a difficult financial situation.