Mankato, MN Bankruptcy Law and Mortgage Lien-Stripping – Behm Law Group, Ltd.
Bankruptcy law can turn on a dime, or at least a dollar. Consider, for example, the “mortgage lien-stripping” clause found in Chapter 13 bankruptcy. In cases where a debtor has a home with more than one mortgage, mortgage lien- stripping may come into play, depending on a multitude of factors. Generally speaking, if a debtor owes more on their home with a first mortgage than the home is actually worth, then a second mortgage could be stripped away via Chapter 13 bankruptcy. Behm Law Group, Ltd. offers bankruptcy advice and assistance in Mankato, MN during your time of need.
However, the margin to qualify for mortgage lien-stripping can be razor thin. For example, if a home is valued at $125,000, but the debtor has a first mortgage of $130,000 and a second mortgage of $40,000, the second mortgage would qualify for mortgage lien-stripping because the debtor clearly owes more on the first mortgage alone than the home is actually worth. The mortgage lien-stripping waters become considerably less clear the closer the first mortgage and actual home value become. For example, if a first mortgage is for $130,000 but the actual home value is currently appraised at $130,001, the margin in that case is considered close enough that any secondary mortgage could not actually be entirely stripped off. Therefore, a single dollar can stand in the way of a debtor being able to discharge several thousands of dollars on a secondary mortgage.
Bankruptcy provisions such as mortgage lien-stripping can be incredibly complex and confusing, and they definitely shouldn’t be navigated by amateurs who aren’t extraordinarily well-versed in the nuances of bankruptcy law. After all, there are thousands of dollars at stake, and debt-holding entities don’t let go of thousands of dollars without putting up a huge legal fight. You need bankruptcy law professionals who can stand knowledgeably in your corner to protect your rights under the law.
The professionals at Behm Law Group, Ltd. are adept at navigating the intimidating landscape of bankruptcy filing and helping clients find their way through the bankruptcy experience. We assist clients throughout Mankato, MN, and all of Southern Minnesota, ensuring they fully understand their bankruptcy options and achieve their best possible outcomes. Contact us today!
Don’t embark on your bankruptcy path without our professional team at your side. Contact Behm Law Group, Ltd. today and start your journey out of bankruptcy.