The Mellor Law Firm, APLC

California Real Estate, Construction, Bankruptcy, Foreclosure and Business Litigation Lawyers

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Lien Stripping Bankruptcy

Riverside, California Lien Stripping Attorney

If you are filing for bankruptcy under the terms of Chapter 13 and have a second mortgage, you may be able to “strip down” or “cram down” your second mortgage in something commonly referred to as “lien stripping.”

If the value of your home is now worth less than what you originally borrowed on your home loan, a judge can remove your second mortgage as part of your Chapter 13 bankruptcy. However, in order to be eligible, your second mortgage must be secured by collateral that is part of your bankruptcy filing, or the home in question cannot be a primary residence.

This is possible under the terms of Section 506 of the Bankruptcy Code which understands a lien as a secured claim only when it is attached to an asset that has value. If a strip down is granted by a bankruptcy judge, your second mortgage is treated like unsecured debt and is wiped out if you adhere to the terms of your Chapter 13 bankruptcy plan over the 3 to 5 year period it is approved for.

There are other options to foreclosure or “walking away” from your home. If you are facing foreclosure and have a second mortgage on your home, contact the lien stripping attorney at The Mellor Law Firm today to learn how we can help you.

Filing for Lien Stripping

If you are eligible for a cram down on your second mortgage, consideration for lien stripping must be included in your Chapter 13 bankruptcy filing. However, the following additional items must be included as part of lien stripping:

  • Home appraisal
  • Appraiser declaration
  • Debtor declaration
  • Current mortgage statement
  • Additional documents as requested

Contact Lien Stripping Attorney at The Mellor Law Firm

If you have a second mortgage and are facing foreclosure, there are other options available which may allow you to keep your home. By filing for Chapter 13, you can reorganize arrears on your first mortgage and strip down your second mortgage altogether. To learn if you qualify and what your options are, contact a lien stripping lawyer at The Mellor Law Firm today.

Call Us: 951-222-2100

Consultations available in-office or over
the phone. Speak to one of our leading attorneys in California today.

Recent News

Are You Dealing with a Homeowner Construction Issue?

August 2, 2022 By Mark Mellor

Homeowner construction flaws and unforeseen shortcomings can quickly become complex and difficult to manage. With the amount of work involved in the construction process, there's a high potential for errors to occur at any stage. If something goes wrong, it can be hard to know … Read More...

How Does Foreclosure Work?

July 26, 2022 By Mark Mellor

The rate of foreclosures for May 2022 in the US was about 1 out of every 4,500 houses. The first step in the foreclosure process is usually a notice of default from your lender. This notice means that you have fallen behind on your mortgage payments, and will state how much you … Read More...

Legal Options for Foreclosure

June 30, 2022 By Mark Mellor

Are you behind on your mortgage payments and facing foreclosure? Do you not know what to do or where to turn? You are not alone. Millions of Americans each year find themselves in the same situation. Foreclosure can be a very frightening process, but you have legal options. Learn … Read More...

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Our Areas of Practice

  • Real Estate
  • Construction Law
  • Mechanic’s Lien – Stop Notice
  • Foreclosures
  • Business Law
  • Contract Disputes
  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy
  • Insurance
  • Lien Stripping Bankruptcy
  • Loan Modifications
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Practice Areas

  • Real Estate
  • Construction Law
  • Mechanic’s Lien – Stop Notice
  • Foreclosures
  • Business Law
  • Contract Disputes
  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy
  • Insurance
  • Lien Stripping Bankruptcy
  • Loan Modifications
  • Personal Injury & Wrongful Death
  • Property Ownership

Recent Posts

  • Are You Dealing with a Homeowner Construction Issue?
  • How Does Foreclosure Work?
  • Legal Options for Foreclosure
  • Do You Need a Lawyer for Your Insurance Claim?

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Contact our offices

The Mellor Law Firm, APLC
6800 Indiana Avenue, Suite 220
Riverside, CA 92506
Phone: (951) 221-4744
Fax: (951) 222-2122
10.0Mark Albert Mellor

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