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What will happen to 2nd mortgage (not purchase money) and private liens on my property after I file Ch 13 BK?

Los Angeles, CA |

A few years ago I refinance my house just to change the rate to adjustable (didn't take out any money). Right now my house is in foreclosure so I am thinking about filing Ch 13 BK to save the house and get rid of many debts in the same time. However, I don't really know what will happen to the 2nd mortgage on the house and 2 private liens behind it. Will Ch 13 BK get rid of 2nd mortgage and liens from the house? Or I am just no longer liable for the debts (2nd mortgage and liens) but they still remain on the house?

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Attorney answers 4


You need to talk to an attorney to figure it out. The information you provided is not enough to answer your question. Generally speaking a Ch 13 filing will remove the second mortgage but only if it is totally unsecured. If your house is still worth more than the first mortgage then this cannot be done.


Lienstripping is a program in Chapter 13 that can eliminate 2nd mortgages & HELOC equity loans.Liens from judgments can be eliminated through a different process, called Avoiding a Lien, and can be done in either a Chapter 7 or Chapter 13. If the lien is not a judicial lien, whether it can be eliminated through Bankruptcy depends on specific facts.

For more information about lienstripping, watch the news shows as

To be eligible for lienstripping, your 1st mortgage must be higher than the value of your home. Nevada Bankruptcy Judges eliminate over $1,000,000 in liens every Thursday between 3 pm and 4 pm. Woo Hoo!


The second (junior) mortgage or deed of trust which is a voluntary lien can be removed from (stripped off) title to the house if the value of the house is less than what is owed on the first (senior) mortgage and other liens against the house filed or in effect before the junior mortgage such as property taxes. That requires a motion to value the house and a determination that the lien created by the junior mortgage is void and that the debt on the promissory note related to the junior mortgage is really unsecured or a more complicated special lawsuit to void the lien called an adversary proceeding in your bankruptcy case depending on the Bankruptcy Court where you filed. You do not specify what the private liens are. If they are for judgments which are involuntary liens then they can be avoided if the house could be exempted as your homestead and the debt owed discharged in either C7 or C13. Personal liability for a debt can be discharged with regard to a mortgage in either C7or C13. That means that you can not be sued for the amount owed and the only way the creditor can get paid is by foreclosure. If successfully can get the court to declare the lien of the junior mortgage void, then the debt is dead and buried.


Voluntary liens that are properly recorded remain on the property until paid. Personal obligations to pay these long term loans is not discharged in Chapter 13 if you keep the house. If the house is worth less than the first, junior liens (second, third, fourth, etc.) can be stripped by filing suit in the bankruptcy court to do it.

You need to know what the house is worth (an appraisal or very good market analysis) and what the payoff is for each lien.

Good Luck.

[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]

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