How Can I Reduce The Payment Owed On My Home?

With the economy in ruins and home prices and values continuing to decline, it is seomtimes possible to "cram down" the debt owed against your home and wither strip off a second mortgage or reduce the payment on a first mortgage within a Chapter 13 bankruptcy.  In a Chapter 13 bankruptcy a debtor is only required to pay the secured value back to the bank.  Here is an example:The homeowner has a first mortgage owing $150,000 and a second mortgage owing $50,000.  The current home appraisal is $145,000.  In a Chapter 13 filing, the homeowner could "cram down" the second morgage and treat it as unsecured.  The homeowner has reduced thier monthly payment by getting rid of thier second mortgage.Another Example:Homeowner has $80,000 worth of debt, at 12 percent interest on a home that is currently worth $45,000.  The homeowner's current payment would be in excess of $1,100 but in a Chapter 13 bankruptcy, the homeowner could lower their payment to $900 per month and pay the home off in five years.

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