Lien stripping is a process that’s available in Chapter 13 bankruptcy in New York. It lets you remove junior liens (second or third mortgages) to make your debt unsecured. Lien stripping is completely unique to Chapter 13 bankruptcy. It is not available with Chapter 7 bankruptcy. 

Let’s learn more about lien stripping and why this could be the lifeline you’re looking for to get back on track with your finances. 

The Concept of Lien Stripping

Lien stripping is all about converting secured debts into unsecured ones. When you strip a lien, it no longer has any claim to your real estate. It’s as if the mortgage lender had lent you money on a handshake rather than on the promise of property.

Let’s say you have a house valued at two hundred thousand dollars with two mortgages attached – one for $210k (primary) and another for thirty grand (secondary). The junior lien gets stripped because its debt isn’t covered by the home’s fair market value.

Benefits of Lien Stripping

Beyond just removing junior liens from your property title, this technique offers more advantages too. For instance, since these stripped liens become part of unsecured debts like credit card debt or medical bills, they might not need full repayment in your Chapter 13 plan.

This process can lighten up some financial burdens but remember – it’s only available under Chapter 13 bankruptcy law and not under Chapter 7 cases.

The Process of Lien Stripping

Understanding lien stripping begins with eligibility. The first condition is that the total amount of the senior lien on your property must be greater than its market value. So, if you’re underwater on your mortgage, you may qualify.

Eligibility Criteria for Lien Stripping

To strip junior liens such as second or third mortgages, one has to file a Chapter 13 bankruptcy case and prove that these are wholly unsecured debts. This means there’s no equity in the property to cover them after considering all senior liens. 

This process isn’t about avoiding payment entirely though. In a Chapter 13 Bankruptcy, you must still submit to the court an accepted repayment plan that allows for as much debt to be paid off as feasible within three to five years.

Classification of Debts in Lien Stripping

Lien stripping essentially converts secured claims into unsecured ones by treating stripped liens just like credit card debt or medical bills – non-priority unsecured debts.

You make payments based on what you can afford rather than what’s owed. Once this payment plan period ends, any remaining unpaid amounts from these converted loans get discharged along with other qualifying unsecured debt.

In essence, lien stripping lets homeowners facing financial hardships keep their homes while managing an otherwise overwhelming mortgage balance.

Legal Assistance in Lien Stripping

Navigating the world of lien stripping can be a challenging journey. Comprehending bankruptcy regulations is not only essential, but also knowing how to use them effectively.

Importance of Legal Guidance

A seasoned bankruptcy attorney, like those at The Law Office of William Waldner, can provide much-needed help during this complex process. Why? They can offer expertise to steer you through the whole procedure. They understand that every financial situation is unique and will tailor their advice accordingly.

This guidance is critical when pursuing lien stripping in Chapter 13 bankruptcy cases as there are many legal intricacies involved. In fact, statistics show that seeking professional assistance significantly increases your chances of success.

Expertise Required in Lien Stripping Cases

Lien stripping isn’t a simple cut-and-dry procedure; it requires specialized expertise – something experienced bankruptcy lawyers bring to the table.

Their practice areas cover everything from mortgage liens to unsecured debts and more. This means they know exactly how to strip junior liens off your property or negotiate debt settlement with credit card companies – all while keeping your best interests at heart.

In short: having an expert by your side ensures you get maximum benefit out of this powerful tool provided by the Bankruptcy Code.


Unraveling the complex knot of lien stripping in bankruptcy can feel overwhelming. But you’ve made it through, armed with knowledge and clarity.

You now understand lien stripping, how it converts secured debts like junior liens into unsecured ones. It’s a lifeline for those struggling to meet mortgage payments.

You learned about eligibility criteria and debt classification during this process. It all plays out within the framework of Chapter 13 bankruptcy case.

Navigating these legal waters isn’t easy – that’s why expert help is vital. The specialized knowledge that lawyers bring could be your beacon guiding towards financial relief.

To schedule your free consultation, contact The Law Office of William Waldner today.