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bifurcation (plural bifurcations) ( 1 biology) A division into two branches. ( 2 by extension) Any place where one thing divides into two. 3  The act of bifurcating; branching or dividing in two.  Either of the forks or other branches resultant from such a 1  division. (geography) A place where two roads, tributaries etc. part or meet.
In this scenario, a mortgage bifurcation acts as a tool that enables the homeowner to manipulate her debt but only applies if the homeowner owes more on the mortgage than the property is worth. However, Chapter 13 bankruptcy law prohibits the inclusion of primary, or first, mortgages in a mortgage bifurcation. Chapter 13 only allows mortgage bifurcations with second or third mortgages on a homeowner's primary residence or with any mortgage on an investment property or second home.