Lien Strip Motions

Families in Temecula, Murrieta, Wildomar, Winchester, in fact all of Riverside and San Bernardino counties are facing the same issue, namely my home is worth $300,000 and I owe more than that on the first plus I have a second mortgage. What can I do? Should I let the home just go back to the bank?​

There are no easy answers to this question. Each individual situation is different. However, in some situations we can perform a "lien strip" with respect to the second mortgage.What is a Lien Strip Motion and How does it Work?
A Lien Strip is the legal process where in a Chapter 13 Bankruptcy, your Second Mortgage (including Home Equity Lines of Credit) are treated as an unsecured debt (much like a credit card) and may be discharged at the completion of the bankruptcy.

There are certain requirements and procedures to follow in order for the Lien Strip Motion to be approved.
  • First, the value of your home must be less than what is owed on the First Mortgage. This is generally proved to the Bankruptcy Court with an Appraisal prepared by a licensed appraiser.
  • Second, the Lien Strip Motion must be filed with the court and the motion approved by the Bankruptcy Judge.
  • Third, the Chapter 13 plan must be completed. Generally speaking, this means that all payments due under the Chapter 13 must be paid and a discharge entered.
If you are interested in finding out more about a Chapter 13 Bankruptcy or if you qualify for doing a Lien Strip, please contact Cristiano & Lillard for a fee initial consultation.

​Contact us to speak with an attorney at our firm about your Chapter 13 bankruptcy questions or current financial situation.