What is the value of the secured claim of the lienholder who is totally underwater? Posted by Jessica Grossarth January 28, The judgment lien does not necessarily have to be junior to all other non-avoidable liens. Chapter 13 involves proposing and getting court approval of a payment plan, making payments on that plan for usually 3 to 5 years, and then getting a discharge of all or most of the remaining debts. San Diego Credit Union S.
Lien Stripping a Home Mortgage in Bankruptcy
Espinosa abrogated these opinions because Espinosa upholds some illegal chapter 13 plans based solely on res judicata. Some courts that allow a strip-off motion also rely on Rule b to comply with the quantitative requirement. Lien Stripping , Proof of Claim. Nevertheless, suppose the rare circumstance happens where the creditor is a private individual, and the only loan the creditor has ever made is now subject to a strip-off. They do not seek a discharge. Finally, Part V provides policy considerations suggesting that strip-off should not require an adversary proceeding.
Lien Stripping a Home Mortgage in Chapter 7 and 13 Bankruptcy - Law Office of Dave Falvey
For both statutory and policy reasons, this Comment takes the position that only a Rule motion is required to strip off a junior mortgage. Rule 2 is ambiguous in its application to strip-off because there are three plausible interpretations of the Rule. Finally, Part V asserts that an adversary proceeding does not furnish any necessary procedural protections not granted by a motion. The Bankruptcy Court began its analysis by acknowledging the unsettled state of the law on this issue. Ohio ; In re Hill, B.
Part I also includes an analysis of two Supreme Court opinions discussing lien stripping: Courts prescribe, or should prescribe, specific requirements for Rule strip-off motions that make it very likely actual notice will occur. Wells Fargo Home Mortg. United did not object that Espinosa failed to demonstrate that paying his student loan interest caused him undue hardship. Can a Partial Lien Strip Succeed? A plan contains several requests for relief, which are adjudicated through confirmation.