There are a plethora of reasons a debtor may consider filing for bankruptcy, under Chapter 7 or Chapter 13 of the Bankruptcy Code. In many cases people are looking for a straight discharge and do not want to pay back creditors. To qualify to file for a Chapter 7 Bankruptcy, the procedures most commonly associated with the straight discharge, the debtor must meet income guidelines for the debtor’s family size. However, even if a debtor qualifies based on income for a Chapter 7 there numerous factors to consider before deciding under which chapter the debtor should file for bankruptcy. Deciding how to file you bankruptcy is something you should speak with an attorney about. There are a variety of issues that can come into play and your rights, both now and in the future, are affected by your bankruptcy proceedings.

If a debtor has more than one mortgage on real property it may be possible to strip the lien. This is only possible if the second or third mortgage is wholly unsecured. This happens when a debtor owes more on the first mortgage than the value of the property. That leaves the second mortgage as wholly unsecured. If the second mortgage is not wholly unsecured it cannot be stripped.

The first step for the debtor to take is to get an appraisal. That way the debtor, and his attorney, is sure before proceeding that the second mortgage is wholly unsecured. From there, an adversary proceeding would need to be filed. One that information is obtained your attorney can file the appropriate documents and notice the creditor and all appropriate parties. The creditor will be given time to respond to the adversary proceeding. If the creditor does not respond the motion can be granted without further proceedings. If the creditor does respond the matter will be set for a hearing and both sides will be permitted to present their case.

Often times debtors ask if there is anything else that can be done. Currently, in the Eastern District of Missouri, there are not any judicial remedies, other than lien stripping, available. A debtor may be able to pursue various other remedies, like loan modification and refinancing. While the debtor may need permission of the court to pursue these remedies, the court will not mandate that the creditor agree to such remedies.

If you have questions about this, or would like to speak with an attorney about lien stripping or a free consultation, please contact a St. Louis Bankruptcy Attorney Today.