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


Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.