With the prospect of the economy slowly starting to turn around, I have heard from a number of realtors that homes are selling fast here in Colorado. Of course that could be due to lack of inventory or it could just be that the realtors I know are really good at what they do and others are still hurting.
If in fact we are seeing a turnaround, property values may start to rise. For many with second mortgages hindering sales, this will be relatively good news. However for many with debt who are hoping to get out from under a second mortgage through the chapter 13 process of stripping off lien that is determined to be wholly unsecured, any increase in property values may ultimately prevent a strip off.
When a debtor in chapter 13 bankruptcy's first mortgage payoff amount is higher than the current fair market value of their home, they can motion the court for a determination that their second mortgage and/or their home equity line of credit (HELOC) is not secured and ultimately have the lien removed and the debt discharged. For many this has made keeping their home a reality.
With home values slowly creeping up, this option may go away for quite a few debtors. If eliminating a second mortgage will make it possible to keep your home and you have been considering bankruptcy as a means to eliminate debt from credit cards, medical expenses or even a failed business, now may be the time to move forward.
Contact Greenwald & Hammond for an in depth, free bankruptcy consultation.
Submitted by:
Mindy Greenwald, Esq.
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