Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi and thank you for your question. In the future, you can request me to answer any further questions.
A chapter 13 permits a cramdown of a wholly unsecured mortgage.
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.
if there is no superior lien, then no, you cannot cram it down and bifurcate the claim as secured and unsecured.
Ch7 offers no such relief either.
thanks for your question, good luck.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).