Questions for a newbie ready to file -

[NEWBIE911]

Hi All -

I am at the point where I should file - but I am getting a bit nervous that my bonus (payable in Feb) and Tax return may be a risk. Any experience in this regard?

Also -
My lawyer thinks I have a chance of reducing my second mortgage due to countrywide over appraising back in 2007 when I opened the loan. It's half secured and half unsecured - anyone deal with stripping partial second?

Thanks folks

[justbroke]

Hi All -

I am at the point where I should file - but I am getting a bit nervous that my bonus (payable in Feb) and Tax return may be a risk. Any experience in this regard?

Also -
My lawyer thinks I have a chance of reducing my second mortgage due to countrywide over appraising back in 2007 when I opened the loan. It's half secured and half unsecured - anyone deal with stripping partial second?

Thanks folks

Let's attack the tax and bonus issue. Depending on your State and what exemptions you have, you may be able to exempt the tax return... maybe the bonus. On your forms, list it as an asset that is pending e.g. "2008 Tax Return" and list it as $1.00 (or estimate it) and apply an exemption to it. Same for the bonus (it's wages).

However, this may not work. You don't want to WAIT because you'd have to wait 6 months after the bonus so it doesn't affect your income calculation!

For lien stripping... you can't "partially" strip or do what's called a strip-down on any mortgage which is secured by your primary residence!

The only thing you can do, is strip off second, third, fourth liens when they have absolutely not $1.00 secured by the property. Example, if you own a house appraised at $500,001.00 and have a first lien (mortgage) of $500,000.00 and a second lien (mortgage) of $250,000.00, you can't strip the second lien.

On the converse, if the home were appraised at $500,000.00 (or less) then you can strip off the second lien.

Be careful, though. The second lien becomes unsecured debt and added to your unsecured debt total. This could push you out of a Chapter 13 if the total of your unsecured debt reaches $336,900. (See my blog on the topic.)

I'm also a pro se filer.

[NEWBIE911]

Let's attack the tax and bonus issue. Depending on your State and what exemptions you have, you may be able to exempt the tax return... maybe the bonus. On your forms, list it as an asset that is pending e.g. "2008 Tax Return" and list it as $1.00 (or estimate it) and apply an exemption to it. Same for the bonus (it's wages).

However, this may not work. You don't want to WAIT because you'd have to wait 6 months after the bonus so it doesn't affect your income calculation!

For lien stripping... you can't "partially" strip or do what's called a strip-down on any mortgage which is secured by your primary residence!

The only thing you can do, is strip off second, third, fourth liens when they have absolutely not $1.00 secured by the property. Example, if you own a house appraised at $500,001.00 and have a first lien (mortgage) of $500,000.00 and a second lien (mortgage) of $250,000.00, you can't strip the second lien.

On the converse, if the home were appraised at $500,000.00 (or less) then you can strip off the second lien.

Be careful, though. The second lien becomes unsecured debt and added to your unsecured debt total. This could push you out of a Chapter 13 if the total of your unsecured debt reaches $336,900. (See my blog on the topic.)

I'm also a pro se filer.

GOOD STUFF! - Thanks! I'm getting better advice here then from lawyer - and he's getting few hundred and hour!.

[john_smith]

I have a similar question:
Does it make any difference in the stripping if originally my second was high LTV - 120% LTV, which mean that it had some secured part and 20% unsecured. So if my house doesn't appraise less then my first, can I still go with the stripping of the unsecured part, since it was 120% LTV to begin with (and even now the houses are depreciating)?

Thanks

[justbroke]

I have a similar question:
Does it make any difference in the stripping if originally my second was high LTV - 120% LTV, which mean that it had some secured part and 20% unsecured. So if my house doesn't appraise less then my first, can I still go with the stripping of the unsecured part, since it was 120% LTV to begin with (and even now the houses are depreciating)?

Thanks

No.

The only thing that really matters is the current appraised (not market) value of the property, and the balance owing on the first mortgage. That's it.

[BigJohn]

I would ask your lawyer for an appraiser that does bankruptcy appraisals.

[john_smith]

Thanks justbroke. You've been very helpful.
Would you be kind enough to answer my other 2 posts:
Here are the links:
http://www.bkforum.com/showthread.ph...194#post226194

http://www.bkforum.com/showthread.ph...ear#post225775

Thanks!

[rrockinggramma]

I found this on a web site KC Bankruptcy Attorney
" We file several different types of cases against mortgage companies. One of the coolest things about bankruptcy law is that you can lien strip second mortgages if they are whole unsecured. I know you are saying what the heck does that mean.

Let's say that a house is worth $100,000. The first mortgage is for $110,000. Then there is a second mortgage (or in Missouri a deed of trust) for $25,000. Lenders are only secured up to the value of the property. So, in this case the first lender is under secured by $10,000. The value of the property is less than the lien by $10,000. Moreover, the second lender has nothing securing their lien. They are unsecured because the property has no value left over from the first lien. So, in a Chapter 13, we can lien strip the second lender. That means that they are treated as an unsecured creditor. It could mean that the second lender will not be able to collect on the mortgage after the discharge and the Debtors still get to keep the house. They would not even have to pay the lien when they sell the house. How cool is that?"

so it looks like in Missouri, you could lien strip IF the first mortgage is more than the house is worth. That makes the second, even at 120 LTV unsecured and it would go into the unsecured pot.

Get a GOOD appraisal from a real appraiser. If it is less than your first, then proceed with the lien strip.

[john_smith]

Thank you!