Back in 2008, the real estate markets suffered a huge drop wiping out most Americans equity in their home. Some people even ended up being upside down on their home and with no way to borrow against your equity to keep going they were forced into foreclosure. Many Americans prior to the 2008 meltdown were borrowing against the equity in their home to have a lifestyle that is basically way beyond their means. Even people that were into their homes at a modest amount, decided it was time to refinance or take out a second and put in an exotic pool with a waterfall in the backyard. When everything started crumbling, these people had nowhere to turn except filing for bankruptcy. Before this happened these folks would use their equity to get them out of a financial bind. With all the equity gone it became time to pay the piper.
Recently, Chapter 13 bankruptcy has gotten a lot of attention because of its ability to strip liens. In today’s real estate market, many Americans are upside down on their home. Taking it one step further, many of these same folks not only are upside down on their first trust deed, but they might have a second and third also. With a Chapter 13 bankruptcy, the bankruptcy attorney can try and file a motion with the court to strip off the liens securing the second and third trust deeds. This will make the loans that were originally secured by the property, now unsecured to be included in the bankruptcy discharge at the end of the Chapter 13 bankruptcy. Many times the debtor is just overwhelmed with bills and a Chapter 13 allows the debtor to get their finances back in check. Chapter 13 bankruptcy can be a complicated process and is best served with the help of a bankruptcy attorney. Before deciding on what to do, call a local bankruptcy attorney for a free consultation to see what Chapter 13 has to offer.