- 1). Complete the bankruptcy forms. You can obtain the forms needed to file for Chapter 13 bankruptcy from the bankruptcy court or from the court's website. A bankruptcy packet contains the petition, real and person property schedules, such as A, B and C, and Schedules E, D, F and I, which document your debts and income.
- 2). File the petition package with the local bankruptcy court in your area. Unless you have an attorney, you must file the bankruptcy documents in person or by mail. Attorneys use the electronic filing option to submit documents. Submit the filing fee ($274 as of 2011), which is only payable with cash, a money order or a cashier's check. You must also file your certificate of completion of credit counseling. Obtaining credit counseling with a court-approved counseling is a requirement you must fulfill within 180 days of filing.
- 3). File a motion to avoid lien with the bankruptcy clerk. A lien will normally survive bankruptcy, which means that you will still be responsible for paying the debt even after your bankruptcy case ends. If granted, the motion will strip the lien. You can obtain the motion from the bankruptcy court.
- 4). Serve the motion to avoid lien on the lienholder. It is sufficient to mail the motion to the leinholder. If the lienholder fails to object to the motion within requisite time, the court will grant your motion.
- 5). Attend the hearing scheduled by the court if the lienholder files a response to your motion. The court will listen to both sides and make a ruling. If the court rules in your favor, the second mortgage will be stripped off and will become unsecured debt subject to discharge at the end of you repayment plan. A ruling in favor of the lienholder means that your second mortgage remains attached to the property.
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