massachusetts bankruptcy exemptions
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In the current economic times, many people are in financial decisions so they dropped assets such as houses, cars and boats, their values strongly live with. Individuals are in their properties, take their values far below the mortgage or car, as assessed on one third of the loan life erased. Those persons with financial difficulties to seek the support of the bankruptcy courts in an attempt to purchase from among all the debts and liens that are now well over their current assets.
There are two types of mortgages that can be attached to an individual property or assets. The first is a voluntary lien which is basically a situation where we agreed to use the assets as collateral for a debt, ie mortgages and car loans. A non-voluntary lien is one that imposes a believer in you and that gives them the right to force you to sell the asset, so that they are paid, for example, judgments against you or liens. These mortgages are either secured or unsecured, to the asset they are attached.
The most common problem these days for a single is the situation where a homeowner, the first and second mortgage on a principal residence from bankruptcy and wonder if they save the ability to house the family. As real estate markets case and where the fair market value of properties, are homeowners with mortgages, leaving the well above the current market value of their homes. It is a process that contribute to could be many in that situation and it is called "lien stripping".
"Lien stripping" refers to the process of reducing a secured claim to the value of the underlying collateral. It uses the combined effect of 11 USCA § 506 (a) and 11 USCA § 506 (d) to unsecured bifurcate the lien secured and locked in. The lien is in the amount up to the fair market value of the property permitted at the time of stripping. The balance of the lien, the market value of the property exceeds is now considered unsecured.
Liens can be deducted from the assets of the debtor in Chapter 11 or Chapter 13 if it is not equity accounted as an asset enough. § 506 (a) and 506 (d) of the Bankruptcy Code recognizes that a lien only one secured claim to the extent it is useful in asset management, to which it attaches great importance. To the extent that the claim exceeds the value of the collateral, the part of the lien is now unsecured. The most common use of lien stripping is to reduce car loan liens on the cash value of the vehicle but it is currently often used with mortgages in bankruptcy situations. Lien stripping with car loans is restricted to vehicles purchased more than 910 days.
The Bankruptcy Code allows Although a bankruptcy plan to "change the rights of holders of secured claims, other than a claim" secured only by a security interest in real estate residence that the debtor is the most important. § 1322 (b) (2). This section provides protection to the holder of a claim only by a lien on the debtors principal residence by prohibiting any amendment secured the conditions, but raised the question whether this section excluded "lien stripping" under secured by residential mortgages in the face of the Bankruptcy Code section 506, at the fork under mortgage secured and unsecured portions of the loss of the mortgage approval appears. At least two bankruptcy court judges in Massachusetts have permitted such bifurcations.
In any case, there is an exception to the lien on the principal residence lien and that is when there is a second or third lien on the same grounds. In this case, those liens, lien stripping is available to them completely unsecured, if the first mortgage balance equals or exceeds the value of personal residence. The only exception is when there are two other mortgages on the property, not a funding situation. It should also pointed out that the limitation of lien stripping of the first mortgage will only apply to personal residences, there is a mortgage on a building may be used for commercial or rental.
As always, all situations, in terms of a strategy bankruptcy and lien stripping in detail with a bankruptcy attorney to understand all your options will be discussed openly.
The forgoing article on lien stripping as a chapter 13 bankruptcy tool was written by the Law Office of Goldstein and Clegg, LLC.
2/23/10: White House Press Briefing
