Ask a Lawyer - Archive

My home has a first, second and third mortgage on it, but is worth no more than the balance on the first. What are my bankruptcy options?

In Chapter 13, you can strip off of the property any lien for which there is no value in the collateral. In your case, if the property's value is less than or equal to what you owe on the first mortgage, the junior mortgages are really unsecured.

A Chapter 13 could avoid those junior liens. You cannot strip off junior voluntary liens in Chapter 7.

An experienced bankruptcy lawyer can walk you through the options and the process, so that you would emerge from Chapter 13 with only the first mortgage encumbering the house.