Tammy: Hi, I'm Tammy Trujillo. I'm here with Greg Shanfeld, a bankruptcy attorney from Wadhwani & Shanfeld. Alright, property values they have absolutely plummeted in the past few years. What can you do to help somebody who is still dealing with high mortgage payments?
Greg: Sure, this economy has left a lot of people with homes that are worth less than what they owe. Often in Chapter 13, we can strip off the second mortgage in its entirety, but Chapter 13 doesn't make sense all the time. So we've been doing a lot of debt settlement for second mortgages, and that's been very helpful for people.
Tammy: How does that work?
Greg: As a bankruptcy firm, we have a lot of leverage in the process. It's going to be largely value-driven. So your mortgage lender is going to look at your home relative to what's owed. But with the threat of bankruptcy, we're often able to negotiate very good settlements, and often sometimes we'll parlay a Chapter 7 into settling that second mortgage. So there are different tool we can use to negotiate down that second mortgage.
Tammy: Now can somebody settle a second mortgage by themselves without an attorney?
Greg: Yeah, anyone can handle legal process on their own. It's just a matter of how effectively they can do it. I think having a bankruptcy attorney that has experience with those kinds of negotiations is certainly going to add value.