Cram down and strip off of liens
What if the otherwise junior lien is nonconsensual? In Travers, however, United Bank, the holder of the wholly unsecured mortgage, argued that Caulkett changes this result. The in rem component of those claims could thus be stripped off despite the unavailability of a discharge in chapter 20, since the discharge, the majority noted, alters only in personam rights and not in rem liability. We will meet with you to evaluate your debts and analyze your finances so that we can give you debt advice and come up with a debt solution. Baran Bulkat , Attorney. In addition, if you have a wholly unsecured second mortgage or other junior lien on your house including your principal residence , you can get rid of it through a process called lien stripping in Chapter 13 bankruptcy. In re Anderson, B.
Learn which debts you can discharge (wipe out) in Chapter 13 bankruptcy.
Strip-Off: What is the Correct Procedure to Avoid a Wholly Unsecured Junior Mortgage?
You are thousands of dollars behind, and also fell behind on other debts. Adversary proceedings force judges to spend unnecessary time rendering decisions on strip-offs, which causes greater costs to be borne by taxpayers. However, at some point down the road, there will certainly be a higher court decision establishing the issue for sure, at which point all of our judges will be obligated to follow it. In the overwhelming majority of cases, the procedural safeguards in strip-off motions are constitutionally sufficient. The latter is colloquially referred to as lien-stripping, but often it is erroneously considered a lien avoidance action, which causes confusion as to how the claim is to be treated in the plan. Both Secured and Junior Banks file proof of claims. Read the full disclaimer here.
Bankruptcy Cramdown of Auto Loans: Saving Your Car in Chapter 13 - Philadelphia Bankruptcy Attorney
The most common example of this is a car loan cramdown that reduces your loan balance to the value of the car. The extra cost and delay may compel the debtor to give up on what is an otherwise legal strip-off. The court can enter a judgment for relief against the creditor if the creditor does not respond to the complaint. However, if the property is valued at one penny less than the claim of the senior mortgagee, the junior mortgagee would be left completely unprotected. The remedy right, therefore, is a bankruptcy exit right and federal concerns overcome the presumption that state law defines property rights. An Essay on Missing the Point , 23 Cap. This Comment argues in favor of the position taken by a majority of bankruptcy courts that strip-off does not require an adversary proceeding.
All of this stems from the postulates set forth in Dewsnup: Louis region and the Midwest. Need Help in Southern California? Robins, Esq offers a Free Bankruptcy Consultation. Moringiello, Mis use of State Law in Bankruptcy: Consistent with Johnson , this would be true even after the debtor has received a discharge of personal liability.