Judge Mannes of the Maryland Bankruptcy Court has ruled that a proof of claim must be filed in order to strip a junior mortgage. Mortgages can be turned into unsecured claims in a chapter 13 case. In many cases, a bankruptcy filer can pay a small portion of a second mortgage or home equity loan in a period of less than five years and never have to make another payment. Generally creditors are responsible for filing a proof of claim or a statement that shows how much they are owed. If this proof of claim is not filed (and it often isn’t), and you have a Judge Mannes case, you run the risk of not being able to strip this claim. Make sure you have an experienced bankruptcy attorney on your side!
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