I have a Home in Florida with Two Mortgages how can Bankruptcy Help?

When many people purchased a home in Florida they obtained two mortgages (an 80/20 split).   A great number of other people obtained home equity lines of credit on their homes as well.  Did you know that by filing for bankruptcy in Florida it is possible to wipeout or discharge a 2nd 3rd or even home equity line on your primary residence?

If you file for a Chapter 13 bankruptcy in Florida you may be eligible to wipe out a 2nd, 3rd, home equity line of credit on your home, allowing you to keep your home with only one mortgage.  Here is a simple breakdown of how it works.

First – Determine the value of your home.

We first must determine the value of your residence.  For court purposes we use the Broward, or Miami-Dade property appraiser websites found here:

For Broward – http://www.bcpa.net/search.asp

For Dade –  http://www.miamidade.gov/pa/property_search.asp

For Palm – http://www.pbcgov.com/papa/aspx/GeneralSearch/GeneralSearch.aspx

Look at the “Market Value” that is given by the property appraiser.

Second – Determine the value owed on your first mortgage

You next need to determine the value owed on your first mortgage.  This can be done either by looking at your last statement or by calling your mortgage company.

Third – Compare the market value of your home to the amount owed on the first mortgage

Compare the market value of your home (from the property appraiser website) to the amount owed on your first mortgage.  If the value of the first mortgage exceeds the market value of your home then a chapter 13 bankruptcy will be able to help you remove, wipeout, or discharge any 2nd, 3rd, or home equity line of credit on the residence.  Here is an illustration:

Home Value (per property appraiser) = $200,000

First Mortgage = $280,000

Second Mortgage = $50,000

Home Equity Line = $45,000

In this example the first mortgage greatly exceeds the value of the home.  A filing of a chapter 13 bankruptcy could wipe out BOTH the second mortgage and the home equity line of credit, leaving you owing only $280,000 on the home.

Home Value (per property appraiser) = $300,000

First Mortgage = $280,000

Second Mortgage = $50,000

Home Equity Line = $45,000

In this example the value of the home exceeds the first mortgage.  Unfortunately when the value of the home exceeds the first mortgage there is nothing that can be done to remove the second mortgage or the home equity line.  If you purchased your home in the last seven years this  example will most likely not be the case.

If you would like to sit down and discuss your home situation with a bankruptcy lawyer then contact Ofer Shmucher at Shmucher Law, PL. We offer free consultations in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

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