In a chapter 13 Bankruptcy in Utah, you might be entitled to reduce the amount you owe on a debt securing personal property (eg:  car, boat, …), which ultimately reduce the amount of your monthly payment.  This strategy is often called a “cramdown.”  However, you cannot “cramdown” or modify voluntary liens on real property (your home).  With that being said, if your home is worth less than you owe on your first mortgage, then you may be able to “strip off” all junior voluntary liens on your home.  This situation arises because the junior voluntary liens are no longer secured by the value of the real property, and through the Chapter 13 Bankruptcy you can convert those liens to unsecured debt.  This procedure allows you to greatly reduce the amount you have to pay each month to stay current on your home.

Example:  If you owed $250,000 on your first mortgage, and $50,000 on your second mortgage, and your home is worth $240,000; then through a Chapter 13 Bankruptcy you can “strip off” the second mortgage and convert it to unsecured debt.  The Second mortgage will generally receive a small percentage over the life of your Chapter 13 Bankruptcy Plan.

To find out if a Chapter 13 Bankruptcy in Utah can help you save your home and/or reduce your monthly payment, contact the Short Sale Advocate.

To find out if a Chapter 13 Bankruptcy in Utah can help you save your home and reduce your monthly payment, contact us by Phone at 866-297-3883 or email at info@shortsaleadvocate.cc.