Have you been struggling through rough financial times for a while? Did your desperation lead you to take out multiple loans on your home? You may have also fallen into the trap familiar to many: rolling an old car loan into a new one that leaves you owing more than the car is worth.
If so, you aren’t alone.
Many people struggling with their debt have second mortgages (or more) that have left them “upside-down” on their properties. In some cases, those loans are from predatory lenders at exorbitant rates, making it all but impossible for borrowers to escape the trap of ever-increasing debt. Others have had to finance a new vehicle before they could pay off the old one or were forced to take title loans against their cars.
A Chapter 13 bankruptcy may be able to help through something known as “lien stripping.” While second mortgages and other liens against your property are supposed to be “secured,” the reality is that they can only be secured up to a property’s existing value. If the liens and second mortgages exceed the value of what you own, they may be “stripped” away.
It’s important to understand that lien stripping isn’t a panacea to all your potential financial woes, but it can be a start — one that may ultimately make it feasible to keep your home or car. Since most people who get into these kinds of situations are trying hard not to lose everything they’ve worked so hard to acquire over the years, that’s a huge potential gain.
To find out more about Chapter 13 bankruptcy and lien stripping and determine if it’s right for your situation, talk to an attorney today.