How to Reduce the Balance on Your Mortgage on Multifamily Dwellings and Rental Properties

How to Reduce the Balance on Your First Mortgage for Multifamily Dwellings and Rental Properties

If you are a homeowner of a multifamily dwelling, such as a duplex or a small apartment building, or if you own a house that you rent to someone else, you may be eligible for a "cramdown" through a Chapter 13 bankruptcy filing. This allows you to reduce the amount of your mortgage to the current value of the property and pay it off over five years at a reasonable interest rate, usually the prime rate plus a small percentage.

For example, if you owe $200,000 on a property that you bought for $250,000 but is now worth $100,000, you would be able to cram down the mortgage from $200,000 to $100,000 and will likely pay a lower interest rate. The remaining $100,000 becomes unsecured debt, as the property is not worth as much as you owe. The unsecured debt would be wiped out by the discharge after you have completed your Chapter 13 payment plan. Our New Jersey bankruptcy lawyers can help you determine if your property qualifies for a cramdown of your mortgage as part of a Chapter 13 bankruptcy.

Cramming down your mortgage can relieve you of both of these problems as the deficiency is wiped out as part of your unsecured debt and the mortgage is paid at the end of the five-year Chapter 13 payment plan. At the end of five years, you own your property outright with no mortgage. It is paid off in full. For people with "underwater homes," Chapter 13 bankruptcy may be an ideal solution.

Contact experienced mortgage cramdown attorneys with offices in Paterson, Jersey City and East Orange today to find the solutions to your financial problems. Call for a free consultation at 973-414-8069 or 888-827-5493.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.