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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2832
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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If Terry is available, hello this is Pat @ WaterMark can

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If Terry is available, hello this is Pat @ WaterMark

can a debtor with a heloc of $145,000. on his principal residence with a fmv of $78,600 expect any relief e.g. a cramdown in ch 13 or a reduction to fmv in ch 7? There is no superior lienholder.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

A chapter 13 permits a cramdown of a wholly unsecured mortgage.

Terry L. :

So, if the balance on the first mortgage is greater than the fair market value of the home, the debtor can treat that 2nd as a wholly unsecured debt, and pay it back at the unsecured rate in the plan, often pennies on the dollar.

Terry L. :

if there is no superior lien, then no, you cannot cram it down and bifurcate the claim as secured and unsecured.

Terry L. :

Ch7 offers no such relief either.

Terry L. :

thanks for your question, good luck.

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