Cram Down your 2nd Mortgage in a Chapter 13

There are basically two types of Banruptcy Debt releif available to New York Residents (180 days of residency in NY).  The most common filing is under Chapter 7 and the second most common is Chapter 13.

Dealing with an underwater 2nd Mortgage

If the principal balance of your 1st mortgage is greater than the market value of your home, this leaves your 2nd mortgage unsecured. In this circumstance I file an adversary proceeding to establish it as unsecured by presenting an appraisal of your property.  If successful, and I generally am,  I can sever your second and put it in a chapter 13 repayment plan along with your other unsecured debt.  You then pay the bankruptcy trustee usually a fraction of this "pot" of debts over a period of 3 to 5 years.  At the end of this period, your second is paid off. Take a look at this recent NY Post article:

http://clicks.aweber.com/y/ct/?l=GLRT8&m=1dM2HFh4UmVf5f&b=4cnocP3taUU__AVMpvqw6g

For Example: I have a debtor in a plan right now where he is paying $700 per month for 5 years to pay off his $150,000 second mortgage and $170,000 in unsecured debt.  Before the plan, his second mortgage payment alone was $1200.

Another Example: Plan payments of $240 per month paying off a second mortgage of 40,000 and credit cards of $30,000.

Here is an 8/12/2010 article written on 2nd lien positions http://www.cnbc.com/id/38672589.

The payment is basically determined by excess available income after all household expenses so you need to be making some money.  Please call so I can give you an idea what I may be able to arrange for you.  631-451-7834.

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johngonzalez@nybklawyer.com

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