People in Illinois struggling with their finances and considering bankruptcy need to contact a bankruptcy attorney to analyze their individual situation. For instance people with a second or even a third mortgage on their home may have some specific questions about their mortgages and their debts.
Many people who suffered financial blows in the past used their home as a way to get back on their feet with a second mortgage lien. These homes were secured by the home's value but now that the real estate market has dropped dramatically your home probably isn't worth what it was before and that second lien isn't secured anymore.
How Can a Chicago Bankruptcy Attorney Help with a Second Mortgage?
If you're one of those people who have a second lien and watched their property value plummet then you will need the help of an experienced bankruptcy attorney to help you file bankruptcy correctly. Filing a Chapter 7 bankruptcy will eliminate your liability on that second mortgage but the lien doesn't disappear. By filing a Chapter 13 bankruptcy you can do something called lien stripping which will eliminate your liability and the lien.
Initially it may sound like a Chapter 13 is the better route because you discharge your liability and the lien, but even though the lien remains in a Chapter 7 bankruptcy, it may not affect your finances much unless the housing market turns around and there is more equity in the home. There is also a way to file both a Chapter 7 and a Chapter 13 bankruptcy by lining them up, one after another, although this has become a bit trickier than it was in the past.
For people who have even more liens on their property the third mortgages and any others will likely be handled in a very similar manner when they meet with a bankruptcy trustee, the loans that came first always get priority and it works that way down the line, each subsequent property lien has less importance in the eyes of the bankruptcy trustee.
There are some additional considerations to review and your situation may or may not qualify but a Chicago bankruptcy attorney can help you determine which route is best for you.