Law Offices of Buddy D. Ford, P.A.

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Discharging Liens Through Bankruptcy

We live in a world where creditors often have the upper hand. As a consumer, there is not a lot you can do to renegotiate the terms of a loan after the economy takes a hit.

At the Law Offices of Buddy D. Ford, P.A., we help level the playing field.

Located in Tampa, our lawyers help individuals and businesses throughout Florida “strip” or eliminate excess loan debt through Chapter 13 and Chapter 11 bankruptcy.

What Is Lien Stripping?

Lien stripping is the process of eliminating unsecured debts from pieces of real or personal property. Liens are “secured” to the extent of the value of the assets. Lien amounts in excess of the property’s value are unsecured and dischargeable in bankruptcy.

A common scenario is a second mortgage. Let’s say you took out a $100,000 mortgage to purchase your home. Later you took out a second mortgage for $50,000 to remodel. The housing market crashed and today your home is worth only $100,000. The result: Your second $50,000 mortgage is unsecured and can be eliminated, or stripped, through bankruptcy.

Another common example is a car loan. If your car loan is more than the value of your car, you can strip away the excess debt down to the present value of the car. The unsecured portion of the loan will be discharged through bankruptcy.

Other common liens that can be stripped by Chapter 13 or Chapter 11 bankruptcy include:

  • Tax liens
  • Mechanic’s liens
  • Judgment liens

Other courts must rely on the terms of the purchase agreement. In these cases, lenders win because the loan document states you will pay the money. Bankruptcy courts are courts of equity. They look beyond the corners of the document and do what is fair.

We Will Evaluate Your Debts And Find The Best Path To Relief

Lien stripping is extremely complex. It is important that you consult with an experienced bankruptcy attorney who understands the nuances of lien stripping. At the Law Offices of Buddy D. Ford, P.A., our lawyers will thoroughly examine your loan documents to determine the priority of liens and identify those that are unsecured. Based on your assets and your debts, we will recommend Chapter 13 or Chapter 11.

For more information about lien stripping, call 813-302-1258 or 866-596-9247 or email us here. Our attorneys will meet with you, review your circumstances and help you find the best path to debt relief.

We are a debt relief agency. We help businesses and individuals file for debt relief under the Bankruptcy Code.