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Paul K, Esq.
Paul K, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 141
Experience:  10 years Exp., Great customer service, Prompt responses.
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I live in California. What are my options to strip a second

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I live in California. What are my options to strip a second TD home equity loan from my house in a Chapter 13? The appraised value of the house, about $460K, is about equal to the first TD. The 2nd TD is $130K. I had heard if the appraised value is significantly less than the 1st TD the 2nd TD could be completely discharged. If the appraised value is equal or close to the 1st TD, as in my case, then can part of the 2nd TD be paid off in a Chapter 13 plan with the unpaid balance discharged? Are there any new laws/regulations that would allow me to reduce the 2nd TD without having to file Chapter 13?

Paul K, Esq. :

Hello, my name is XXXXX XXXXX I would love to assist you. Give me a moment to research your issue and I will answer promptly.

Paul K, Esq. :

Basically, many courts call it the $1 Rule:

Paul K, Esq. :

If your mortgage is only $1.00 more than the value of your property, then you can remove and discharge the second mortgage.

Paul K, Esq. :

On the other side, unfortunately, is that if your property is worth $1 more than your first mortgage, you have to pay the second.

Paul K, Esq. :

The best thing to do is get an appraisal of the real estate prior to filing and let the appraiser know you "are hoping to get a number of X" and make that number like $5,000 or so less than you owe on the first mortgage to be safe.

Paul K, Esq. :

Usually if you hire the appraiser and are paying them, sometimes they are helpful and can use comparables around the amount you need.

Paul K, Esq. :

As far as outside of a Chapter 13, you can contact the second mortgage about the federal Principal Reduction Plan and see if they will reduce or erase the mortgage.

Paul K, Esq. :

A good site for info on this is www.keepyourhomecalifornia.org

Paul K, Esq. :

If you have any more questions, please let me know. I will be off and on throughout the day and night and can assist your further.

Paul K, Esq. :

Have a great day and dont forget to provide a positive rating!!!!

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