What is Lienstripping in Chapter 13 Bankruptcy?

Chapter 7 Bankruptcy or Bankruptcy Discharge does not get rid of liens.  Bankruptcy discharge only gets rid of your personal liability to the debt and the lien will remain in the property.

If you want to get rid of a junior lien on your home (aka second mortgage, equity line of credit), you should consult an experienced Sacramento Bankruptcy Lawyer to determine if you qualify for a Chapter 13 Bankruptcy Lienstripping.  The general rule is that if the value of your home must be less than the balance of your first mortgage or first deed of trust, Chapter 13 Bankruptcy Lienstripping will turn the junior lien from a secured claim to an unsecured claim.  The unsecured claim of your second mortgage or equity line of credit will be discharged upon completion of your Chapter 13 Bankruptcy plan.  If you fail to complete your Chapter 13 Bankruptcy plan even if your motion to lienstrip the second mortgage or equity line of credit was granted, the junior lien will remain on your home.

Muoi Chea Sacramento Bankruptcy Attorney has Bankruptcy Offices in Sacramento, Stockton, and Fairfield, California to help residents of Northern and Central California get a FRESH START.