Today I heard about a couple’s predicament:  They just had their second child.  Mom is staying home.  So the couple went from a two-income household to a one income household.  However, they did not go from a two-mortgage home to a one-mortgage home at the same time! As a result of the blessed event, they also faced big credit card and medical debts.  What to do?

Well, they could file a chapter 7 bankruptcy – if they qualify through the means test.  Their previous six-months income was still high, but that would change within a short period of time.  They could also try to defeat the presumption they are abusing the system by showing the permanent change in their income since Mom is staying home with the kids.

This would eliminate a lot of debt, but not the debt that’s giving them the most headaches:  Their second mortgage.  It’s a high interest home equity loan.  And the house is worth even less than the first mortgage. So we discussed Chapter 13 as an option.

Despite the huge influence banks have over Congress, the bankruptcy laws still allow a couple to eliminate the second mortgage in the Chapter 13 if the house is worth even less than the first mortgage.  This is fantastic news for our couple because they can stop paying their second mortgage, and pay their chapter 13 Plan instead.  That plan will mean that those creditors will be old news in 5 years, and so will that pesky second mortgage.    It may seem counterintuitive – paying more money saves you more money?  But sometimes that’s just the way it works out. 

For financial relief in Kenosha, Racine, Walworth or Milwaukee, call Lakelaw today at 262.694.7300 and ask for Attorney Ryan Blay or David Leibowitz. 

This post was written by Ryan Blay, Supervising Attorney in Lakelaw’s Kenosha office.

Share/Save

Lakelaw represents people in Wisconsin in Consumer Bankruptcy Cases and in defending against mortgage foreclosures.  Our office is in Kenosha.  However, we can help you just about anywhere in the State.  In Wisconsin, lawyers frequently appear in court by telephone and remote access.  We find it saves us a lot of time driving around the state.  We think that if this is good enough for us in working with the courts, it’s good enough for you in working with us.  If you would like to work with an outstanding, Board Certified, bankruptcy lawyer, recognized throughout
Wisconsin for expertise in mortgage foreclosures, Lakelaw is the place for you – from Eau Claire to Kenosha and from Monroe to Green Bay.  If you are reading this blog, you have demonstrated that you are techologically advanced.  We use technology to project our practice throughout the state.  Call 1 – 866- LAKELAW (525 – 5359) for bankruptcy and mortgage foreclosure help now.

Share/Save