Lien Stripping Lawyer in Michigan

Discharging Debt in Michigan

When a homeowner gets in a financial bind, one of their main concerns is whether or not they will be able to prevent the loss of their house. Filing for a Chapter 13 bankruptcy can have considerable advantages in this regard, especially when there is a second mortgage. Not only will the bankruptcy stop any foreclosure proceedings, it can also result in the second lien being stripped. If you are a homeowner that is considering bankruptcy, speak with a Michigan bankruptcy lawyer regarding your financial situation. A bankruptcy lawyer can discuss the benefits of Chapter 13 bankruptcy in more detail, including how it:

  • Prevents a foreclosure
  • Enables you to catch up on missed payments over a 3 to 5 year period
  • Can result in the stripping of a second lien

How Lien Stripping Works

When real estate values were increasing, many people with equity in their property took out second and third mortgages. Declining market values resulted in many homeowners owing more than their house was worth. A large percentage of property owners also ended up with higher monthly mortgage payments due to increased interest rates. In a bankruptcy, if you have a second mortgage on your home, the judge can decide to strip the second lien. This is because lenders are only secured up to the value of the property. If you home is worth $150,000 and you have a second lien for $50,000, the second lien is not secured by any collateral and can be discharged as unsecured debt.

My firm, Hensel Law Office, PLLC specializes in bankruptcy cases and has prevented many individuals in dire financial straits from losing their home. There are many strategies that can be employed to avoid a foreclosure. I can explain your options and discuss how a second mortgage can be stripped when filing for Chapter 13 bankruptcy protection. If you are heavily in debt and live in Madison Heights, Royal Oak, Sterling Heights, Clinton Township, Warren or surrounding areas, I will do everything that can be done to protect your assets. I will also provide you with dedicated and highly skilled legal support throughout your bankruptcy case. Contact the firm today to learn more!