I live in Orange County CA. Is it possible to file Ch.13 after a discharged Ch.7 in order to strip down a second mortgage?

Asked about 5 years ago - Anaheim, CA

Is it possible to strip down a second mortgage not covered by the value of the home (primary residence)? Is it possible to strip-down the loan on a rental property to the market value of the rental home? Let us assume that the 2nd mortgage on the rental property is $90,000. The market value of the home is 280,000, while the 1st mortgage is $320,000. Would the first mortgage be striped-down to $280,000? As I understand the $280,000 should be paid within 3 to 5 years of Ch.13 plan. Should I pay an interest on the amount owed during this period? What happens to my rental income during this period? Do I receive them personally? Can I refinance or sell the property within the 5 year period of the plan to pay back the $280,000, the striped down value of the property? Thank you for your attention.

Attorney answers (1)

  1. Kristine Caroline Kyllander

    Contributor Level 9


    Lawyer agrees


    Answered . Yes it is possible to cramdown loans and/or strip liens in a Chapter 13 case immediately following a Chapter 7 discharge. This is commonly referred to as a "Chapter 20."

    You may not need to pay full value of the secured debt over the 3- 5 year plan period and you do get to keep the rental income during the the plan (presumably to use it to service the debt).

Related Topics


There are different types of debt, but all involve one person (the debtor) owing money to another (the creditor). Terms of repayment are governed by a contract.

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