Posted On: April 3, 2010
Underwater Homeowners Find Florida Bankruptcy May Eliminate 2nd Mortgage Debt
Currently, over four million Florida homeowners are “underwater” on their mortgages – meaning they owe more than their home is worth. In addition, many of these Florida mortgage holders hold more than just one mortgage, and wonder what their obligations might be to repaying a second or third mortgage if they file for Chapter 7 or Chapter 13 bankruptcy.Filing Florida Chapter 13 bankruptcy may help you eliminate payments on a second or third mortgage since the first mortgage is more than likely secured by the entire value of the home and will be paid first. While you still owe the money, if your Florida home has been appraised for less than what you owe on the first mortgage, there will be no money for the second mortgage lender. This allows the court to strip away the second mortgage as unsecured debt, which takes last priority in a repayment plan under Chapter 13 bankruptcy and often does not have to be paid back at all.
Filing for Chapter 13 bankruptcy in Florida makes it easier for a homeowner to keep their home if you are able to make payments under a court-approved plan, which usually lasts for three to five years.
If you are a Florida resident who is underwater on your mortgage and considering filing bankruptcy, you should consult with a Florida bankruptcy attorney to understand all your options. For more information, contact our Jacksonville, Florida bankruptcy law firm.
Greg Gilbert
Keith Maynard
