A little known but increasingly popular provision of the bankruptcy code is being used by many struggling homeowners to eliminate second mortgages and avoid foreclosure. Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.
Struggling Homeowners Use Bankruptcy Code Provision to Eliminate Second Mortgages
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