Chapter 13 Bankruptcy: Lien Stripping Explained
By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).
In this Podcast episode, I discuss the common misconceptions regarding mortgages and bankruptcy. Below are the key points that will be discussed regarding Chapter 13 bankruptcy and lien stripping.
Listen: The Professor’s Audio Briefing.
Filing for bankruptcy doesn’t automatically eliminate your mortgage. That is especially a common error when it comes to second mortgages. Because of that, homeowners are coming across “zombie mortgages,” which means a lender is seeking payment years later. You can read about zombie mortgages in the prior blog post below.
Unlike credit cards or personal loans, mortgages are secured debts tied to your property. Secured debt, if you are filing for bankruptcy and keeping the asset, is not dischargeable in bankruptcy whether Chapter 7 or Chapter 13 bankruptcy is filed.
Chapter 7 bankruptcy, known as a liquidation, eliminates unsecured debt and is the most common type of bankruptcy filed. However, if you need to catch up on your mortgage payments, only Chapter 13 can help you keep your home.
Chapter 13 is known as a reorganization and could help you catch up on missed payments. However, Chapter 13, under limited circumstances, could also reduce a second mortgage, sometimes even eliminate it. That is known as lien stripping and will also be discussed in this Podcast and YouTube video.
The original post of this podcast can be seen below:
- Will Filing for Bankruptcy Wipe Out My Mortgage? If you prefer to see this video on my YouTube Channel, click here:
You can also watch the video below. Any questions or comments, please feel free to post them in the comments section of my YouTube video.
Professor Hernandez is an attorney specializing in consumer finance and debt relief. He is the published author of Consumer Bankruptcy Law (Routledge Publishing) and teaches law and finance courses in both English and Spanish for an international university.
Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.
You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.
You can find additional categories by clicking below or by using the search feature at the top of this page:
Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.
Initially updated on January 30, 2025.
Discover more from Bankruptcy.Blog
Subscribe to get the latest posts sent to your email.
Pingback: Does Filing for Bankruptcy Wipe Out My Mortgage - Bankruptcy.Blog