You can wipe out a second mortgage in a Chapter 13 bankruptcy in some situations. In order to eliminate your second mortgage, the value of your house must be lower than what you owe on your first mortgage. If the value of your house is one penny more than what you owe on the first mortgage, you cannot wipe out the second mortgage in your Chapter 13 bankruptcy.
If a large number of foreclosures have occurred recently in your neighborhood, this will bring down the fair market value of your house. As a consequence, this will make it easier to eliminate the second mortgage in a Chapter 13 bankruptcy case. Dalton, Cartersville, Calhoun, Rome, Hiram and Dallas, Georgia have suffered a high number of foreclosures during this past year.
When trying to determine the value of your house, a good place to start is your property tax bill from your county. Somewhere on the bill, you will find a statement that says fair market value. While this a good place to start, you will need more evidence than your tax bill because most counties tend to understate the fair market value of houses. In some areas of Northwest Georgia, housing values are so depressed that even the county estimated fair market values are too high.
A much more reliable source of evidence is a written appraisal by a certified expert. When getting your appraisal, make sure you explain to the expert that you may wish to hire them to testify in court if necessary. Some appraisers want to stay away from court at all costs.
In Northwest Georgia, I recommend that any client who needs to appraise property call Bob Mines at 77-655-9015. He is certified and has a significant amount of court experience.
Cost for appraisals can vary based on the size and nature of the real estate. Another factor to consider when hiring an appraiser is the cost for them testify for you in court if the second mortgage company decides to challenge your appraisal in bankruptcy court with their own appraisal.
If you live in a mobile home and have a second mortgage, the chances of you eliminating the second mortgage are much higher than someone who owns a house because mobile homes depreciate so rapidly.
Nothing in this post should be interpreted as legal advice. No attorney client relationship exists until we have a written contract.
3. How much does it cost to file?