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Personal bankruptcy can turn the tables on creditors (part 1)

Wayne County residents all too often feel as if they are completely alone as they struggle with financial challenges. The bank is likely not really on your side; neither are the credit card companies or debt collection agencies. They are all looking to get as much as they can out of you, heedless of what the consequences could be for you and your family. Fortunately, a bankruptcy law professional is not only willing to stand up for your legal rights, but can even turn the tables in some ways.

For example, lien stripping is one tactic that can benefit individuals with second mortgages on their property. We've reviewed before on our blog how in a Chapter 13 bankruptcy filing, secured debt must be paid off in full while unsecured debt only gets paid in partial over course of the repayment period (up to five years) and the remainder discharged. Because a mortgage is debt secured by property, it cannot be discharged in bankruptcy.

Wayne County residents who owe more on their first mortgage than their home is worth, however, may have a unique option. If they also owe less on their second mortgage than their first, they may be able to convert that second mortgage into unsecured debt. The argument for doing so is that because the home is worth less than the total owed on the first mortgage, there is no equity left to secure that second mortgage. As unsecured debt, it becomes eligible for discharge in a bankruptcy filing along with credit card debt, medical debt and other unsecured debts.

Lien stripping is just one example of how a bankruptcy law professional can bring options to the table that Wayne County residents may not be aware of, even though they can make the difference between drowning in debt and waking up to a fresh financial start. More information is available on our Westland Attorney for Loan Cram-Down Help page. We'll take a look at another such tactic in a follow-up blog post.

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    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

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    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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