In California and elsewhere, homeowners may be able to reduce their overall mortgage debt in Chapter 13 bankruptcy. Here's how.
In Chapter 13 bankruptcy, you can reduce the total amount of your mortgage debt by stripping off second or third mortgages that are underwater.
This option becomes available when the value of the home falls beneath the balance due on the first mortgage. In this scenario, the subordinated loan then becomes unsecured in the eyes of the court and is treated like other unsecured debts such as credit cards.
By eliminating this debt, the homeowner can lower the monthly home payments to a more affordable level.
To learn more, see the articles in Your Home in Bankruptcy.
From the author: Get a Free Consultation from a California Bankruptcy Attorney
