Stripping Mortgages and HOAs (home owner association) in Chapter 7 Bankruptcy
August 28, 2014
Stripping Mortgage in Chapter 7 Bankruptcy
Filing a Chapter 7 Bankruptcy with the Law Offices of Keith D. Collier can yield many unexpected and significant benefits. For example, did you know that filing a chapter 7 bankruptcy may allow you to get rid of your second mortgage?
The procedure is called a “lien strip”. A lien strip is possible when your home is worth less than what you owe on your first mortgage. For example:
Your house is worth $100,000.00.
You owe $150,000.00 on your first mortgage and $50,000.00 on your second mortgage.
Because your house does not contain enough equity or value to secure the second mortgage, that lien is subject to being stripped off via a motion in your chapter 7 bankruptcy. This means that when you finish your chapter 7, the only debt that will exist on your house is your first mortgage. A chapter 7 is typically a four to six month process with one hearing at which you need to be present. To learn more about the chapter process, click here (http://www.keithdcollier.com/chapter-7-bankruptcy.php
Past HOA’s Dues or Liens Stripped and Discharged in Chapter 7
With the surge in foreclosures and abandoned homes, more and more homeowner’s are facing increased homeowner association dues. This is because the total expense for maintaining the property inside the community is now divided amongst fewer people because other have been foreclosed on or simply abandoned their property.
The increase in these HOA fees can then lead to other residents falling behind or struggling to keep current with their own HOAs. If you fall behind on HOAs, the homeowner association is then usually allowed to foreclose on your property to try to satisfy the debt or just bully you into paying astronomical HOA dues that you can’t afford.
HOA dues can be addressed in several different ways through bankruptcy. In a chapter 7, the dues that have built up until the date your case is filed can be discharged and wiped out so that you are not personally liable for them. In a chapter 13, the past due amount can either be brought current over the duration of your chapter 13 repayment plan OR it may even be stripped off just like a second mortgage. The past due balance of HOAs can only be stripped off if you owe more on your first mortgage than the house is worth.
At the Law Offices of Keith D. Collier, we pride ourselves on giving you EVERY option available so that you can make a well-informed decision that will put you and your family back on the path to financial stability. Call today for a free in-office or phone consultation.
Mortgage Modification Mediation Program under Chapter 13 Bankruptcy Court
Did you know that filing a chapter 13 bankruptcy with the Law Offices of Keith D. Collier may actually help you get a real loan modification on your house? The chapter 13 court allows us as your attorneys to file a motion at the beginning of your case that will actually FORCE the mortgage company to come to the negotiation table so that we can try to work out a loan modification to save your home or investment property.
There are two great things about trying to obtain a loan modification through the chapter 13 court:
1. Filing the chapter 13 invokes the bankruptcy code’s “automatic stay”. The “automatic stay” is a federal injunction against your creditors, including your mortgage company, that may stop any foreclosure proceeding dead in its tracks. This then allows you to try to reorganize your debt and save your home under the protection of the bankruptcy code.
2. The Court and chapter 13 Trustee oversee the whole process. This means that banks can’t use the “we never got that document” or “you didn’t send in the right page” excuses any more. All documents are submitted via a secured web portal that can be reviewed for accuracy and completeness at any time. More importantly, all documents are reviewed and submitted us, your attorneys. This way you know that everything is being provided to the mortgage company so that you maximize your chances of obtaining a loan modification.
Your home is usually your greatest asset. Making the decision to try to save it should not be taken lightly and you should always consult a professional to ensure that you are fully educated as to what options you have and likely success of each option. At the Law Offices of Keith D. Collier, we strive to ensure that every loan modification negotiation is performed with your best interest at heart and we always try to get you the best deal possible. This may include principle forgiveness, interest rate reduction, and extending the duration of your mortgage.
Call us today to see how we may be able to help you save your home.