“Lien stripping” has become very popular lately, as home values have declined. A competent bankruptcy attorney will be on the lookout for situations when lien stripping can be an effective tool in a Chapter 13 bankruptcy.
Simply put, if you have two mortgages on a piece of real estate and the current value of the property is less than the balance due on the first mortgage, the bankruptcy court very well might be willing to strip the second mortgage off the property, leaving it with just the first mortgage attached. Of course, there are many details to consider, so you need an attorney competent in bankruptcy to help you with lien stripping.
At Osenton Law Offices, P.A., we have assisted many clients in stripping mortgages off of their property. As home values bottom out and start to go back up, the window of opportunity for lien stripping will close. As is true in so many situations, timing is everything.