Remove a Second Mortgage or Home Equity Loan to Improve Your Credit
In these difficult economic times, many families have paid the price in regards to incomes, home values and their individual credit. What do you do if you are no longer able to manage all of your debt obligations, including your second mortgage or home equity loan? Have you defaulted on your second mortgage or home equity loan causing bad credit? Or is your primary concern to preserve or improve your credit, but your home is worth less than what you owe on it?
Through a Chapter 13 Reorganization plan, we have answers and solutions. The Chapter 13 program has several distinct benefits that will help you to reduce debt and build your credit throughout the course of the plan. Call one of our qualified Chapter 13 attorneys at 866-261-8282 to discuss your options today. We offer free phone or in-office consultations at one of our six office locations in Detroit, Ann Arbor, Dearborn, Southfield, Flint or Warren, Michigan.
How Will the Chapter 13 Plan Improve My Credit?
- Rebalance home value to current market conditions
- Through the Chapter 13 program we can legally remove your second mortgage or home equity loan as a secured lien against your property and convert it to an unsecured debt obligation through the process of “lien stripping”. You are simply required to make your best efforts to pay back the debt over a 36 – 60 month time period. Whatever is not paid will be eliminated. At the end of the program, you will only have the primary mortgage. This will reduce the mortgage load on your home and offset the effect of decreased real estate values.
- You still have the option to pursue a loan modification on your primary mortgage to seek a further reduction in monthly payments. With a balanced budget and improved credit, you may be in a better position to qualify for the modification.
- If you own a rental property(s), we can reduce the total mortgage obligation (including primary mortgage) to the current market value. Using your tenant’s monthly rent payments you will own the property free and clear at the completion of the 3 – 5 year repayment plan.
- Improve debt-to-income ratio
- One of the main factors of credit is your debt-to-income ratio or leverage. This measures how much available income you have to pay down your debts vs. paying your monthly living expenses. Since the Chapter 13 establishes repayments terms at 0% interest for your unsecured debts, including the 2nd mortgage or home equity loan, your payments are applied straight to the principal debt each month. This plan works to reduce your debt-to-income ratio each month through the plan.
- At the end of the 36 – 60 months, all remaining balances of unsecured debts, including the second mortgage or home equity loan, are eliminated. This will also improve your debt-to-income ratio and your credit and allow you the opportunity to obtain new credit that you may not have previously qualified for.
- Achieve debt free existence in regards to unsecured debts, including your second mortgage or home equity loan, within 36 – 60 months.
- Since the Chapter 13 program legally eliminates remaining balances from unsecured debts at the completion of the program, you can look forward to freedom from your second mortgage, home equity loan, credit card bills, medical bills, etc.
Is Chapter 13 Bankruptcy the Right Choice for Me?
At Acclaim Legal Services we specialize in improving people’s finances and helping them achieve financial freedom while still maintaining their integrity. We understand the stress associated with debt and we want to help relieve that. We encourage you to set up a time to speak with one of our qualified Chapter 13 attorneys to discuss your options and determine if this program is right for you.
We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in Detroit, Southfield, Dearborn, Flint, Ann Arbor and Warren, Michigan. Please call us toll free at 866-261-8282 or Click Here to schedule a consultation right now.