In recent years Orlando, Florida homeowners have suffered a significant loss of value in their homes as a result of the economic recession. Before the “mortgage meltdown” you may have taken out consolidation loans or home equity lines of credit to pay off credit cards, perform home repairs, or for other personal reasons. Creditors encouraged these loans by bombarding the public with advertisements of small monthly payments, low interest rates, and tax write-offs. When property values dropped, homeowners suddenly had no home equity to cover the mortgages now burdening them.
The Bankruptcy Code § 506 permits a debtor to “lien strip” and remove second and third mortgages if the value of their property is at least $1.00 less than the balance of their first mortgage. If the value of your Orlando home is currently less than the amount owed on your first mortgage, contact Tudhope Law today to learn how Chapter 7 or Chapter 13 bankruptcy can remove these second and third wholly unsecured mortgages from your property.
Until recently, lien stripping to remove a second mortgage was only available in Chapter 13 bankruptcy cases. However, due to a new ruling in the case of McNeal v. GMAC (In re McNeal) Case No. 11-11352 (11th Cir., May 11, 2012), lien stripping is permitted in Chapter 7 bankruptcy cases as well. Even if you have previously received a discharge in a Chapter 7 bankruptcy and your case is now closed, it may still be possible for your attorney to reopen the case and strip down second and third unsecured mortgage liens. Because of the danger that this opinion could be overturned in the coming months, it is urgent that you contact us today to file the necessary paperwork to overturn and strip off these liens.
In addition to lien stripping to remove a second mortgage, bankruptcy allows you to stop foreclosure, lower interest rates on automobile or other loans, and eliminate unsecured debt. It may even be possible in the case of certain unsecured investment properties for a first mortgage to be “cramdowned” to the actual value of the property. It is important to contact an experiences Orlando bankruptcy attorney as soon as possible because the laws and procedures governing cramdown and lien strip actions are currently under review in the Florida Federal Appellate Court System.
If your property is unsecured due to second or third mortgages, we can help. Contact Tudhope Law in Orlando at (407) 969-0044 to schedule a free consultation and discuss how you can benefit from the recent changes to the lien stripping laws in Florida.
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