HELPING GOOD PEOPLE THROUGH HARD TIMES
In a Chapter 13 (but not a Chapter 7) is it possible to "strip off" or remove a second mortgage like a line of credit from your home.
To do it you need to have a house that is worth less than the first mortgage. For instance, if the house is worth $200,000 and the first mortgage has a balance of $220,000 then it is possible as part of a Chapter 13 to have the Court enter an Order Voiding the 2nd mortgage. One catch: you need to complete your Chapter 13 to successfully and permanently remove the 2nd mortgage.
So even if you qualify to file a Chapter 7 the filing of a Chapter 13 might be a better choice!