Lawyer
Nathan A. Berneman
Attorney at Law
Nathan A. Berneman, APC
Practice Areas
BANKRUPTCY - CHAPTER 7 AND CHAPTER 13.
BANKRUPTCY:
Chapter 7 and 13 bankruptcy on behalf of individuals and businesses.
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C. LIEN STRIPPING:
The Lien Stripping program is available for individuals desiring to reorganize their debt using Federal Laws under Title 11 of the United States Code. The mortgage removal can only be used in the context of a reorganization, often referred to as Chapter 13. If you own a home or rental property wiht more than one mortgage, you may be able to completely remove the second and subsequent mortgages from your home and county recrods, thus leaving only the first mortgage.
If you qualifty, all mortgages except the first would no longer be secured by your home or rental, and you stop all payments to those creditors while in the Chapter 13. There is nothing the creditor can do, provided you qualfy for a simple three part test:
1. The first mortgage is eqaul to or higher then the fair market value of the home;
2. You have income or have contributions for your income that are greater than your household expenses; and,
3. Your total unseucred debt is less than $383,175 and your secured debt is less than $1,149,525.
For instance, suppose you have a first mortgage of $400,000 and a second mortgage for $150,000 and the house is worth $390,000. Under this program, the $150,000 gets removed and and you only need to make monthly payments on the first mortgage of $400,000. However, in many cases, the judge will make the Order that the lien will be treated as unsecured; paid pro rata with all unsecured creditors and the lien removed only upon completion and discharge of the Chapter 13 Plan.
A. CHAPTER 7:
One of the primary purposes of bankruptcy is discharging unsecured debts to give you a "fresh start". A discharge is only available to individual debtors only and not to partnerships or corporations. A bankruptcy discharge does not extinguish a lien on property automatically, unless you decide to surrender that item (i.e. - house, car, furniture, jewelry, etc.).
Under Chapter 7 bankruptcy , an individual is permitted to retain and keep all of your "exempt" property. Accordingly, potential clients who file for Chapter 7 should realize that the filing of a petition under bankruptcy may resut in the loss of property. Each and every situation is different, but that is why it is important to review your case thoroughly with a bankruptcy attorney so you can make an informed decision as to which bankruptcy is right for you.
Nevertheless, my office will meet with you personally to go over your particluar case so you can make an informed decision.
For more information on filing for Chapter 7 or Chapter 13, schedule an appointment for a free consultation with Nathan A. Berneman, Esq.
B. CHAPTER 13:
The Chapter 13 "Reorganization" or "consolidationn" allows you to consolidate your debts into one low monthly payment. The payment amount is tailored to your disposable income after your household expense are paid. Chapter 13 is technically a bankruptcy but is viewed at differently since it is not a "straight" bankruptcy that simply eliminates debts without payments whatsoever. Instead, it consolidates all missed mortgage payments ("arrears"), taxes, car payments, other secured debts, unsecured debts and spreads the repayment over a 3 to 5 year period. If you are trying to save your home, the net result for your mortgage would be that it is legally reinstated by Federal Court Order and you continue to make your normal mortage payments on an ongoing business. As for your other unsecured debts that were included in the bankruptcy, they will be discharged even if you only paid them a small percentage as to what may have been owed.
Fox example, if you owe $9,000 in arrears on your mortgage, your Chapter 13 payment would be approximately $150 per month (60 months X $150 = $9000). Note: There would also be a small fee to pay to the Chapter 13 Trustee along with the $150.
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