A Helping Hand For Michigan Families
Over 120 years of combined legal experience advocating debt resolution for our clients.
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Can My Second Mortgage Foreclosure on My Home in Michigan?
Yes, secondary lien holders have the same legal right to foreclosure on your home as the primary mortgage company. The Michigan foreclosure process is the same for the first mortgage holder as it is for the second mortgage lender. The main reason that it is not as common for the secondary lender to foreclose is because that lender would have to satisfy (pay off or negotiate a settlement) on the first mortgage in order to get clear title to the property. When home values are underwater, it makes it more difficult to work out an amicable arrangement for both lenders. With home values finally starting to appreciate, secondary mortgage foreclosures may begin to increase. In recent years, we have been seeing secondary lien holders circumventing the foreclosure process and just suing homeowners to collect on the debt. If they get a judgment, the next step is to secure a garnishment. This could mean 25% of your net pay being taken each pay period or the creditor emptying your bank account. This has an obvious and devastating effect on your monthly budget. In addition, once the creditor has a judgment in place, they can continue to renew the judgment and collect on the debt almost indefinitely while late charges and interest fees continue to mount. This can severely hamper your ability to qualify for future credit.
Avoid a Secondary Mortgage Foreclosure by Removing the Second Mortgage or Home Equity Loan
One way to avoid a secondary foreclosure sale from occurring is to remove their lien interest by filing a Chapter 13 reorganization plan. This process converts the secondary mortgage or home equity loan to an unsecured d ebt obligation and allows you to pay only what you can reasonably afford to pay over a 36 - 60 month time period. Whatever balance that is unpaid is legally eliminated at the completion of the process through a court discharge.
Stop a Michigan Foreclosure Sale and Reduce Your Debts
Filing for Chapter 13 protection will stop a Michigan mortgage foreclosure sale regardless of whether it is initiated by the first or secondary lender. The program also provides unique debt reduction opportunities such as:
- A reduced interest rate on vehicle loans and possible reduction in principal balance owed;
- Defer, consolidate and likely reduce unsecured debt obligations such as credit cards, medical bills, personal loans, loan deficiency debt, etc.;
- Stop other creditor actions, such as vehicle repossession.
Stop a Lawsuit, Judgment or Garnishment by Filing for Bankruptcy Protection
If your secondary lien holder pursues the debt or is granted a judgment or garnishment, it can be immediately stopped by filing a Chapter 7 or Chapter 13 bankruptcy. By filing Chapter 7 you will eliminate the debt, but not the creditor's lien interest in your property. By filing for Chapter 13 protection you can reduce the debt and eliminate the remaining debt balance as well as the lien interest at the completion of the debt consolidation program. We will review both options with you in detail at a free consultation and recommend your best course of action based on your total income, debt and long term goals. To understand all of your foreclosure and debt relief options, call our office today at 866-261-8282 to speak with a licensed Michigan bankruptcy attorney. We offer free consultations and comprehensive advice.
Latest Posts
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Attorney Christopher W. Jones Quoted in DS News Magazine
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Avoiding Bankruptcy in 2023
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Attorney Christopher Jones was nominated and voted to become a 2022 Super Lawyer
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What to Expect About Your Credit Report After Your Discharge
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When I started at Acclaim they were every helpful in explaining the things i need to know an what all the paper work i needed to get together. As i went through all the process on my Chapter 13 bankruptcy they kept me informed of all i need to do and to get for them. If…
Five years ago I was in so much debt that I couldn’t think straight. I wasn’t eating or sleeping properly. Then I lost one of my jobs (neither one was paying very much, just a bit over minimum wage). I began to be late on my house notes every month. I got into a car accident which threw me behind…
After five years we finished our chapter 13 plan on June 2. We finally got the discharge and can continue on our new life.
This experience has been very stressful and embarrassing. I am so grateful that Cindy Milln and Chris jones were assigned to us. Both have answered our questions either…
I wanted to take a few moments and offer a sincere THANK YOU for all the hard work that everyone at Acclaim Legal Services has done so far on my Chapter 13 Bankruptcy case. As you know, this process has a lot of emotional attributes for the filing person and is not a position I ever foresaw.
Since…