{"id":780,"date":"2017-11-01T10:13:08","date_gmt":"2017-11-01T15:13:08","guid":{"rendered":"http:\/\/www.mankatobankruptcy.com\/blog\/?p=780"},"modified":"2017-11-01T10:13:08","modified_gmt":"2017-11-01T15:13:08","slug":"secured-liens-waseca-mn","status":"publish","type":"post","link":"https:\/\/www.mankatobankruptcy.com\/blog\/secured-liens-waseca-mn\/","title":{"rendered":"Stripping Secured Liens on Property During Chapter 13 Bankruptcy in Waseca, MN"},"content":{"rendered":"<p>While Chapter 7 bankruptcy is designed to help individuals and small businesses with low incomes and <a href=\"\/blog\/2016-09-13\/debts-not-discharged-under-chapter-7-bankruptcy-in-mankato-mn\/\">dischargeable debts<\/a>, Chapter 13 is more beneficial to those who may have higher incomes yet still struggle with financial obligations. Because in most cases you cannot qualify for Chapter 7 bankruptcy with an income higher than the Minnesota median income level, Chapter 13 can be your saving grace for relieving debt and restructuring your finances in a manner that is suited to your income. If you\u2019re considering filing for Chapter 13 bankruptcy in Waseca, MN, Behm Law Group, Ltd. can offer legal advice and assistance throughout the process.<\/p>\n<p>The process of debt reorganization that takes place during a Chapter 13 case requires the examination of your different debts to determine how they can be handled. One aspect of your debts and your property that is analyzed is the subject of <a href=\"\/blog\/2016-11-04\/liens-automatic-stays-and-set-offs-understanding-terminology-involved-with-bankruptcy-in-mankato-mn\/\">liens<\/a> your creditors may have on your house, vehicle or other property.\u00a0 Creditors with such liens have debts that are secured or collateralized by your property.\u00a0 If you don\u2019t pay the creditors, they can take their collateral, sell it and use the sale proceeds to retire the debts you owe them.<\/p>\n<p>If your creditors have a secured liens on your property, you\u2019ll have to continue repaying those debts directly to those creditors during your Chapter 13 repayment plan. However, there are some ways you can strip secured liens from the property serving as collateral, thereby turning them into unsecured debts. In most Chapter 13 repayment plans, only small percentages of unsecured debts are paid back.<\/p>\n<p><strong>Strippable Liens<\/strong><\/p>\n<p><strong>\u00a0<\/strong>If there is a \u201cjunior\u201d lien on an asset you own, you may remove that lien and turn the secured debt into unsecured debt. \u00a0A common example of a junior lien is a second or third mortgage on your house.\u00a0 For example, if you own a house that has a market value of $150,000.00 and there is a first mortgage with Creditor A in the amount of $155,000.00, a second mortgage with Creditor B in the amount of $25,000.00 and a third mortgage with Creditor C in the amount of $10,000.00, you have total mortgage debt in the amount of $190,000.00 against an asset that is worth $150,000.00.\u00a0 The house is collateral for all three mortgages.\u00a0 However, the mortgages with Creditor B and Creditor Care junior liens to the mortgage held by Creditor A.\u00a0 They are lower in priority with regard to foreclosure rights or collection rights to the property.\u00a0 The mortgages with Creditor B and Creditor C are wholly unsecured mortgages because the entire market value of the house is less than the amount of the mortgage held by Creditor A.\u00a0 If Creditor A were to foreclose its mortgage on the house, Creditor B and Creditor C would get nothing because the entire foreclosure sale proceeds would be extinguished through payment on the mortgage held by Creditor A.<\/p>\n<p>When you have wholly unsecured junior mortgages or junior liens on your house, such liens can be stripped off of your house through the Chapter 13 bankruptcy process.\u00a0 When a junior lien is stripped, the subject mortgage debt, is treated as an unsecured debt.\u00a0 It is no different than a credit card debt or a medical debt.\u00a0 This means that you do not have to fully repay the debt.\u00a0 It will be completely discharged when your chapter 13 bankruptcy is concluded.<\/p>\n<p>Understanding when you can and cannot strip a junior lien can be difficult without the guidance of a qualified legal professional. Take advantage of the expert counsel our bankruptcy attorneys provide for your bankruptcy case. Contact Behm Law Group, Ltd. at (507) 387-7200 today for more information about filing for <a href=\"\/bankruptcy-chapter13.php\">Chapter 13 bankruptcy<\/a> in Waseca, MN.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While Chapter 7 bankruptcy is designed to help individuals and small businesses with low incomes and dischargeable debts, Chapter 13 is more beneficial to those who may have higher incomes yet still struggle with financial obligations. Because in most cases you cannot qualify for Chapter 7 bankruptcy with an income higher than the Minnesota median [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[30],"tags":[],"aioseo_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Stripping Secured Liens on Property with Ch. 13 Bankruptcy<\/title>\n<meta name=\"description\" content=\"Help your Ch. 13 debt repayment process with the help from Behm on stripping secured liens on your property in Waseca, MN. 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