Financial hardships can strike anyone at any time. The process of dealing with any kind of permanent or temporary financial crisis can be overwhelming and confusing, as bankruptcy laws have changed over the years. For Florida homeowners who have a second mortgage, stripping a second mortgage may be one way to get a handle on finances and move forward with less debt overall.
A second mortgage is essentially a loan borrowing against equity in a house. During great financial booms or times of stability, a second mortgage may have been a great idea. As the crisis hit Florida and all across the country, having a second mortgage lingering over heads simply added to the stress of many homeowners. With no equity and rising payments, both first and second mortgages became a great source of financial strain on homeowners who may have seen no relief in sight.
Chapter 13 bankruptcy is an option that may help homeowners deal with debt. Under Chapter 13 bankruptcy, debt can be restructured. As part of this restructuring, a second mortgage can sometimes be stripped. There are very specific criteria that must be met for this to happen, and not all homeowners with a second mortgage will qualify.
There are differences in the types of bankruptcy a homeowner may qualify for or from which he or she may benefit. It is important to understand how certain types of debt can be restructured or even discharged under certain circumstances. When it comes to stripping a second mortgage, a Florida homeowner may find more information on our website and may discover facts about bankruptcy that he or she may not have understood previously.