Bankruptcy in Lansing: Second Mortgages Forcing Home Owners Underwater
The tough economy has forced thousands of people to do whatever it takes to keep their homes, including taking second mortgages on their property. However, this has left many homeowners underwater, seeking answers for their financial future.

November 17, 2011 /24-7PressRelease/ -- Bankruptcy in Lansing: Second Mortgages Forcing Home Owners Underwater

Thousands of Michigan residents are facing foreclosure and thousands more currently own homes that are underwater -- owing more on their mortgage(s) than the home is currently worth.

The problem is compounded when people decide to take out a second mortgage on their home. According to The Wall Street Journal, 40 percent of homeowners who have a second mortgage are underwater on their loans, amounting to double the rate of people with only one mortgage.

Families struggling with underwater mortgages often wonder what will become of their home if they can no longer afford their payments. Luckily, however, Chapter 13 bankruptcy can provide both temporary and long-term financial relief, often saving a home in the process.

Benefits of Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy people do not liquidate their assets in order to repay their creditors. Rather, people draft a repayment plan -- typically ranging from 3 to 5 years in length -- which they submit to the court for approval. These plans dictate the payments that will be made to creditors for the length of the agreement.

A debtor must abide by the terms of the repayment plan once it has been confirmed. If done correctly, all remaining dischargeable debts will be wiped clean, often including any second or third mortgage attached to a property.

Debtors also receive immediate temporary relief from creditors and collection efforts. Once a Chapter 13 bankruptcy petition is filed an "automatic stay" is put into effect which prohibits creditors from undertaking any collection efforts including phone calls, mailings and foreclosure.

Chapter 13 bankruptcy is mutually beneficial. A debtor gets to keep his or her property, while creditors usually get more money than if the debtor had liquidated his or her assets under Chapter 7.

Ready to Save Your Home?

Anyone facing foreclosure due to underwater mortgages should speak with an experienced bankruptcy attorney immediately. It is possible to save your home and rebuild your economic situation, but it takes a qualified attorney and your dedication to make the process work.

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