Lien Stripping Attorney In Orlando

If you took out multiple mortgages on your home and now face overwhelming debt, it may be possible to cancel one or more of your home loans through bankruptcy. This is called "lien stripping." Can lien stripping work for you? Let's discuss your case in a no-cost consultation.

I am Sam Pennington, a bankruptcy lawyer with offices in Orlando and Tavares. With more than 25 years of experience in bankruptcy law, I have helped thousands of people throughout Florida find debt relief and save their homes through bankruptcy.

Florida residents have even more protection than people in other states because they can strip second or third mortgage liens in Chapter 13 bankruptcy and in Chapter 7 bankruptcy (in most circuits, lien stripping is only allowed in Chapter 13). The U.S. Supreme Court is currently looking at this law, however, so please contact me to learn if it is possible in your case.

How Does Lien Stripping Work?

The best way to explain lien stripping is by giving you an example. Let's say you have a property that is worth $200,000. The first mortgage is currently $230,000 and you have a home equity line for $100,000. In this case, your home is "underwater." It is worth less than the amount you have due on the first mortgage. If your first mortgage company foreclosed on the property, it would be the only one to receive any equity from the sale.

This means that your second mortgage lender has zero equity in the home and is, essentially an "unsecured creditor." If you go through the lien stripping process, this second loan will become an unsecured claim and the lender will get a pro rata share of whatever money goes to unsecured creditors in your bankruptcy.

What Does It Mean For You?: Saving An Underwater Home

It means that, if your home is underwater and you have multiple liens on it, you may not need to worry about paying off anything but your first mortgage. This may mean that you get to keep your home.

The law, however, is complicated and may change, so I strongly recommend talking to an attorney experienced in lien stripping about your options. During my free consultation with clients, I help them understand what choices they have and which of those choices can help them move through the current storm they are facing into a better tomorrow. Please call 407-278-7776 or 352-508-8277 or send me an email.

Pennington Law Firm, PA, is a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.