Lien Stripping

Years after the housing collapse of 2006, many people in Fort Lauderdale and throughout South Florida are still upside down on their homes. If your mortgage exceeds the value of your home, the attorneys of Nowack & Olson have many tools available to help you pick yourself up, wipe out certain debts and begin anew.

Individuals pursuing Chapter 7 or Chapter 13 bankruptcy in Florida have an additional tool for getting rid of second mortgages and liens. These debts are secured debts, which means the creditor has a right to take your home if you fail to pay. During a lien strip, however, the bankruptcy court can essentially turn them into unsecured debt by forcing the lender to remove its lien on the property.

Bankruptcy may allow you to strip off a second mortgage or homeowner association lien without paying all your back assessments and dues.

The second mortgage or lien will be treated as unsecured debt in your bankruptcy, which means it is treated just like your medical or credit card debt. You will have a schedule for repayment that requires you to make certain payments on a reasonable timeline, then the remaining debt is discharged at the end of your plan.

As you can see, lien stripping has the immediate benefit of allowing you to not pay your second mortgage. There is also the long-term benefit of dismissing your second mortgage lien when you complete your plan and get discharged.

Questions About Lien Stripping? Call Nowack & Olson.

Like all matters involving bankruptcy and real estate, lien strips are highly complex and should not be attempted without first consulting a lawyer. Please contact us at 888-813-4737 to learn more about our experience and how we can help you. We offer free initial consultations and services in Spanish.