It’s finally official. If your home is underwater (your house is worth less than the amount owed) and you have a second mortgage (sometimes known as HELOC or junior loan) you might be able to get rid of the second mortgage in a Chapter 7 Bankruptcy.
If you meet the criteria to qualify for a Chapter 7 Bankruptcy, you may be able to get rid of your second mortgage all together, along with other unsecured debts, much like Visa, Sears, and medical bills. The Eleventh Circuit Court of Appeals ruled in the case of Malone v. Wilmington Trust that such “strip offs” are permitted in Chapter 7. Formerly, strip offs were only permitted in the more costly and time-consuming Chapter 13 cases.
If you are interested in lowering your monthly debt on your home, and getting rid of your second mortgage, please call the Law Office of Debra G. Simms for your bankruptcy consultation.