modification

Lien Stripping in Chapter 13 Bankruptcy For our readers playing along at home, the basic rule with mortgage modification in bankruptcy is as follows: first mortgages on a debtors primary residence cannot be modified by filing for bankruptcy, however, second, third and other junior liens can be modified or “stripped” by filing for Chapter 13 [...]

In cases where a homeowner is drastically underwater, the Bankruptcy Code gives chapter 13 debtors the ability to forcibly modify a second mortgage and thereby reduce their housing costs. As the real estate crisis continues to linger, many consumer advocates have been vocal in supporting proposed legislation that would extend bankruptcy’s mortgage modification power to [...]