Filing Chapter 13 in Syracuse, NY

In filing chapter 13 in Syracuse, we file a plan for you showing how you will pay off some of your past due and current debts over three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property especially your home and car which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors.

You should consider filing a Chapter 13 plan if you:

  • Own your home and are in danger of losing it because of money problems.

  • Are behind on debt payments, but can catch up if given some time.

  • Have valuable property which is not exempt, but you can afford to pay creditors from your income over time.

  • You have a second mortgage that may be eliminated if your house is worth less than what you owe on your first mortgage.

You will need to have enough income during your chapter 13 case to pay for your necessities and to keep up with the required payments as they come due.

A recent survey on government web sites purporting to offer advice and information to consumers facing foreclosure found that most of these web sites do not mention bankruptcy at all, despite the fact that Chapter 13 bankruptcy can get consumers caught up with their payments and even eliminate 2nd mortgages on ‘underwater’ homes.

These results shouldn’t surprise you. After all, banks don’t want you to file bankruptcy. Lenders hate it when borrowers file for bankruptcy because it puts you, the consumer, in the driver’s seat, giving you rights that the bank is now forced to deal with. Unfortunately, most people don’t know that a Chapter 13 bankruptcy can cancel out (known as ‘stripping the lien’) your 2nd mortgage as long as the appraised value of your home is lower than what you owe on the 1st mortgage. Allow me to explain.

Understanding A Chapter 13 Bankruptcy

Allow me the opportunity to provide you with the information you need to make an informed decision.

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Thousands of residents in Syracuse, Cortland, Ithaca, Auburn, Oswego and Central New York, and all parts in between, are now ‘underwater’ on their home mortgages, and they are looking for a way out. If you have decided to walk away from your home because you feel you have no other options, schedule a FREE consultation with me first. Wouldn’t it be much easier to save your home if you only had a 1st mortgage and no other payments? Chapter 13 bankruptcy in Syracuse Federal Northern District may help you do just that.

In the case of 2nd mortgages, if the value of the property falls below the loan amount of the 1st mortgage, current bankruptcy law allows judges to eliminate the 2nd mortgage. If the courts remove this 2nd mortgage, this is known as ‘stripping the lien.’

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  • Home is appraised at $100,000.00.

  • The 1st mortgage is for $105,000.00.

  • A 2nd mortgage/Home Equity Line of Credit is for $50,000.

  • The mortgage loans total $155,000 on a home currently valued at $100,000.

36 month Chapter 13 payment plan is set up stripping the second mortgage. After filing a Motion to Strip Lien and completion of the 36 month plan, the new total owed is $100,000.00 thus; giving you positive equity in your home.

What I’m going to share with you now is POWERFUL INFORMATION for homeowners who have 2nd mortgages and are finding themselves ‘underwater’. This is vital information you need to protect yourself and make an informed decision about your future!

  • Most likely the second lender will not be able to collect on the mortgage lien after the bankruptcy discharge, and the homeowners (debtors) still get to keep the house.

  • Lenders are only secured up to the value of the property.

  • The second lender has nothing securing their lien. Their lien is unsecured because currently the property has no value left over from the first lien. Therefore, they are treated as an unsecured creditor.

  • After completing the Chapter 13 plan, the homeowners would not even have to pay the lien when they sell the house.

Keep in mind that Chapter 13 Bankruptcy in Syracuse is not without its drawbacks. It is more cumbersome, and it does takes longer; however, filing Chapter 13 does have its benefits as well. One major benefit is valuing your car at fair market value rather than what you still owe on your loan. For example, if you purchased your car more than 910 days before you file your bankruptcy petition, you are only responsible for paying an amount equal to the present value of the car. Numerically, this means that if you still owed $18,000 on a car but its fair market value is only $8,000, you would only be required to pay the $8,000 in your repayment plan. This means you could potentially save $10,000.