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About Foster Law Group, P.C.Now accepting all Major Credit Cards
Get directions to our offices:
View Larger MapOffice Phone: 303-297-7729
Office Fax: 303-845-9924
2810 N. Speer Blvd
Denver, CO 80211
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Recent News Articles
Falling Home Prices and resulting increase in Chapter 13 Lien Stripping
U.S. homes values have continued to decline in the last two years. As a result, the equity in homes throughout the U.S. (especially Colorado and surrounding states) has continued to decline. Many experts estimate that by 2012 nearly 50% of all homes will be upside down (i.e. under-water). A Deutsche Bank report on the decline of U.S. home prices estimated that the percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2012.
This decline in home equity throughout the country has increased the number of homeowners who are seeking to get out from under their second mortgage through a Chapter 13 bankruptcy. As a result of decreased home values, thousands of homeowners throughout Colorado may be eligible to strip-off, there second mortgage/s. These unsecured mortgages may be eligible for treatment as "unsecured debts" within a Chapter 13 Bankruptcy.
After the value of the home has been established and a determination of the ‘secured status’ of the second mortgage has been made, the second mortgage/s are lumped together with the clients other unsecured debts, such as credit card and medical bills, and are usually paid off for pennies-on-the-dollar through a either a Chapter 13 ‘full’ or in most cases ‘partial’ repayment plan. By the end of the required 36 to 60 month Chapter 13 repayment plan, the homeowner finds themselves in a much better position than most homeowners. That is, they have one affordable monthly mortgage payment and no credit card or medical debt. In addition, the homeowners' credit is likely to improve due to their reduced debt to income ratio and months of positive Trustee payments.