Bankruptcy: Chapter 7 - Lien Stripping of Second Mortgage

Woodstock - Kennesaw area Bankruptcy Attorney - Lien Stripping of Second Mortgages in Chapter 7 Bankruptcy cases in Georgia.

The Problem of a Second Mortgage on Your Residence:

Bankruptcy debtors in Georgia are frequently faced with the difficult decision of what to do about the debt on their residence.  In recent years, it has been increasingly common for the homeowner to find that the value of the home is exceeded by the amount of debt owed on the mortagages secured by the property.  Many times the "negative equity" in the residence is the result of a second mortgage loan.

Lien Stripping in a Chapter 7 Bankruptcy in Georgia: No longer allowed.

Lien stripping in a Chapter 7 bankruptcy case was briefly allowed in Georgia under a ruling by U.S. Eleventh Circuit Court of Appeals (This Circuit inlcudes Bankruptcy Courts in Georgia).  However on June 1, 2015, the U.S. Supreme Court issued a ruling in the case of Bank of America vs. Caulkett, which declares that the lien of a junior mortgage  lien (even if there is no equity supporting it) may not be voided or "stripped" from its secured position.   So, lien stripping in a Chapter 7 case is no longer available to the debtor.  It remains an option in a Chapter 13 case.

NOTICE:  The services or benefits offered are bankruptcy relief under the provisions of the U.S. Bankruptcy Code.  We are a debt relief agency.  We help people file for bankruptcy relief under the Bankruptcy Code.

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