Client came to us three months behind on first mortgage, with substantial credit card debt, and second and third mortgages (home equity lines of credit) which client was unable to pay. The client had also been sued by a credit card company and its debt collectors, resulting in a judgment lien on the client’s home. The second and third mortgages were completely “unsecured” in that the value of the client’s home was less than even the balance due on the first mortgage. The client had been considering withdrawing funds from the client’s 401(k) plan to pay off the credit card debt and catch up on the mortgages. After retaining us, we instead filed a Chapter 13 bankruptcy on behalf of the client, preserving the client’s retirement funds, and prepared a plan which allowed the client to catch up on the first mortgage with manageable payments over time, “stripped off” or removed the second and third mortgages, and eliminated a large proportion of credit card debt. We also filed a motion with the Court to remove the judgment lien.

RESULT : When the client has completed the Chapter 13 Plan, client will have made up all past due first mortgage payments, removed mortgages and liens other than first mortgage and discharged almost all credit card debt, obtaining a fresh start and greatly improving the client’s financial situation.

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