Quoted from Chrysler Repays Billions, Was Bailout Worth It?
From the post Avoiding a Foreclosure
Foreclosure vs Bankruptcy – AVOIDING A FORECLOSURE You have received a Notice of Default or a Lis Pendens – either way the lender has initiated a foreclosure against you. […]
Debtor – in – Possession (DIP) financing is essentially financing provided to companies that have filed for Chapter 11 bankruptcy / reorganization protection. DIP financing is a unique […]
This piece in the San Jose Mercury News is kind of vague about how homeowners are getting rid of second mortgage obligations, so it’s no wonder people are flummuxed about the concept. What it discussed isn’t magic but a technique called lien stripping that we bankruptcy lawyers employ all the time. Unfortunately, despite the fact that bankruptcy is Federal, the effectiveness of a lien strip and steps necessary to carry it out vary from jurisdiction to jurisdiction. But yes this is real; and yes homeowners can walk away from second mortgages that are truly unsecured. Note that lien stripping is not in any way the same as loan modification. Bankruptcy Courts have yet to crack that nut.