Many people here in New Jersey have more than one mortgage. This may be because they purchased it with an 80/20 loan (one loan for the “downpayment," another for the remainder of the purchase price), borrowed money for a home improvement like a kitchen remodeling, or got a debt consolidation loan.
Either way, many times when they fall into financial hardship, that second mortgage payment can become a burden. The question becomes, if you have to file bankruptcy, can you get rid of it? “Stripping off” a mortgage in bankruptcy is possible, but there are three things to bear in mind. Get more information here.
- You must file a chapter 13, not chapter 7
- Your home value must be substantially lower than your first mortgage balance
- You must complete your chapter 13 plan