How a “Lien Strip” or “Strip-Off” Can Help My Under Water Second Mortgage

10 Mar How a “Lien Strip” or “Strip-Off” Can Help My Under Water Second Mortgage

Editorial Cartoonist Ed Stein (

Editorial Cartoonist Ed Stein's take on underwater mortgages

About 25% of all mortgages in the United States are “Under Water,” that is, a mortgage where the property is worth less than what is owed on the mortgage. Many people who own these properties also have second mortgages, equity lines, HELOCs, or tax, HOA or other liens, pushing the property still farther into the red. A Chapter 11 or Chapter 13 bankruptcy may offer a solution: the “Lien Strip,” or “Strip-Off.”

A lien strip lets you stop paying the second mortgage (or equity line, HELOC or lien), treat it as a general unsecured claim, and at the conclusion of the case when you get the discharge, the lien must be released. Since liens generally survive a bankruptcy discharge, a lien strip requires that you file a Motion to Avoid Lien with the Court and have it granted. Then you have to make all of the required payments under your reorganization Plan and receive a discharge.

To be eligible for a lien strip, your first mortgage must be more than the value of your property.

This is not always a simple process, and you should discuss whether you are eligible for a lien strip with your bankruptcy attorney.


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Brett Weiss, a senior partner at The Weiss Law Group, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11, and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his colleague, Daniel Press, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the previous Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute and the Bankruptcy Bar Association of Maryland. He has received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, the United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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