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Lets wipe out your second mortgage and keep your house

NOTE: While this article refers to second mortgages, the concepts discussed also work on third mortgages, home equity lines (HELOCs) and any other debts secured by your home EXCEPT for first mortgages and homeowner associations.

Many houses in South Florida are “underwater” or worth less than what was originally paid for them.  Many homeowners took out second mortgages or home equity lines to make improvements on their homes in anticipation of staying there for a long, long time.  Those same homeowners are watching as the values of these homes continue to decrease as their mortgage bills continue to rise. Regardless, there are many homeowners that want to keep their homes because they like their neighbors, the kids are happy at school or it is simply, “your” home.  

What is the solution? Is it a loan modification? Or do you have to look at doing a short sale?  Many times these are not viable options due to the endless amount of paperwork and uncooperative banks.  Meanwhile there are other homeowners that are making the decision to simply walk away from their houses and deal with the consequences later.

However, there is a valuable tool that many homeowners are not aware of -- Chapter 13 bankruptcy.  The U.S. Bankruptcy Laws allow a bankruptcy judge to eliminate or “strip” a second mortgage or home equity line debt when the first mortgage debt is more than the house is worth. As an added benefit, if the owners are behind on their first mortgage, the Chapter 13 bankruptcy can allow them up to 60 months to catch up on their payments interest free! You can even eliminate credit card and other debts in a Chapter 13 bankruptcy.  Imagine what you and your family could do with that extra money.

Is this the right option for you? Call us at the Bankruptcy Law Clinic at 305-663-3281 for a free, no obligation consultation.    You don’t have to lose your home. Don’t you wish all your decisions were this easy?


The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice, nor the formation of a lawyer/client relationship. The Bankruptcy Law Clinic has offices in both Miami, and Doral FL and assists clients in the areas of Miami, Doral, Miami Beach, North Miami Beach, Opa Locka, Hallandale, Hialeah and Hollywood Florida and the surrounding areas.



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