The Law Office of Kim Covington

Call For A Free 1-Hour Consultation
541-393-2790 | 800-673-1891

Please Ask For Kim Directly When Scheduling An Appointment

Underwater homeowners in Oregon can stay afloat with Chapter 13

The latest Census Bureau reports indicate that the financial recovery is sluggish in many areas across the United States. Many homeowners in Lane County have taken out second mortgages in past years and are now struggling to make not one, but two mortgage payments in addition to their other financial obligations. Those who are faced with the possibility of foreclosure may want to consider reorganizing their debt and making payments more manageable with Chapter 13. This type of bankruptcy may also allow homeowners to discharge second mortgages altogether.

Second mortgages often referred to as junior liens, can be discharged by filing Chapter 13 as long as certain conditions are met. If the current market value of your home is less than the balance on your primary or senior mortgage, any junior liens on the home can be discharged. For instance, if your home is worth $150,000 but you still owe $150,001 or more on your mortgage at the time you file Chapter 13, the second mortgage could legally be discharged. Junior liens on homes that are not considered underwater, however, cannot be discharged under current bankruptcy laws. Another thing to keep in mind is that most lenders will use their own appraisers to determine the value of a home and could fight the release of a second mortgage based on their valuations.

Chapter 13 is often a feasible way for underwater homeowners in Oregon stay afloat financially, but it is always a good idea to discuss all of the available options with a legal professional before filing. Someone who is well versed with the latest bankruptcy laws, exemptions and local real estate conditions can help you decide if it is in your best interest to file for personal bankruptcy or pursue other means of debt relief to prevent foreclosure. 

Source:, “Can Chapter 13 Help Me Get Rid of Second Mortgage?,” Justin Harelik, Sep. 11, 2013.

No Comments

Leave a comment
Comment Information
email us for a response

Learn More About Your Fresh Financial Start

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.

The Law Office of Kim Covington

The Law Office of Kim Covington
1445 Willamette Street, Suite 9
Eugene, OR 97401

Toll Free: 800-673-1891
Phone: 541-393-2790
Fax: 541-344-6466
Eugene Law Office Map

P: 541-393-2790

T: 800-673-1891

F: 541-344-6466