Keywords:
mortgages .
liens .
lien stripping .
secured debt .
The court ruled that for purposes of avoiding junior liens, the petition date should be used to determine a home's value. In this case, since the market value of the home was worth less than the amount owed on the first mortgage (as of the petition date), the court voided the junior mortgage.
wholly unsecured mortgage does not count as unsecured debt for purposes of Chapter 13 eligibility, citing Scovis v. Henrichsen (In re Scovis), 249 F.3d 975 (9th Cir 2001) and in re Miller, 907 F.2d 80 (8th Cir 1990)
The court ruled that the Means Test does NOT include payments owned to wholly unsecured creditors. Here, the Trustee objected to the debtors' proposed plan. The Trustee argued that debtors understated their disposable income because payments owed on two junior mortgages should not have been deducted in the Means Test. The court ruled in favor of the Trustee on this point.
The debtor tried to avoid a lien by filing an objection to the claim, but debtor did not file an adversary proceeding to challenge the lien amount. The court held that "if the debtors seek to strip off a lien, they must do so in the context of an adversary proceeding, with adequate safeguards for service, and a meaningful opportunity for hearing. In the instant case, service was not effected upon the individual or statutory agent, but only upon the corporate entity at a drop location. This is not adequate." Here, the court also warned the debtor's attorney that trying to avoid liens like this again would be "dealt with as contempt" of court.
Does not follow Tran
Follows Tran
Does not follow Tran
whether an individual debtor in a chapter 13 case can avoid a junior lien on entireties property. The Court concludes that a debtor can avoid a junior lien in these circumstances.
Debtors cannot strip off wholly unsecured junior mortgages through plan confirmation. Debtor's plan stated that lien would be "stripped' but that wasn't enough to actually do it. Adversary proceeding required in this court.
Lien stripping requires adversary proceeding and cannot be stripped by wording in the Chapter 13 plan.
Does not follow Tran
Follows Tran
Does not follow Tran
whether an individual debtor in a chapter 13 case can avoid a junior lien on entireties property. The Court concludes that a debtor can avoid a junior lien in these circumstances.
The court ruled that for purposes of avoiding junior liens, the petition date should be used to determine a home's value. In this case, since the market value of the home was worth less than the amount owed on the first mortgage (as of the petition date), the court voided the junior mortgage.
wholly unsecured mortgage does not count as unsecured debt for purposes of Chapter 13 eligibility, citing Scovis v. Henrichsen (In re Scovis), 249 F.3d 975 (9th Cir 2001) and in re Miller, 907 F.2d 80 (8th Cir 1990)
Debtors cannot strip off wholly unsecured junior mortgages through plan confirmation. Debtor's plan stated that lien would be "stripped' but that wasn't enough to actually do it. Adversary proceeding required in this court.
Lien stripping requires adversary proceeding and cannot be stripped by wording in the Chapter 13 plan.
The court ruled that the Means Test does NOT include payments owned to wholly unsecured creditors. Here, the Trustee objected to the debtors' proposed plan. The Trustee argued that debtors understated their disposable income because payments owed on two junior mortgages should not have been deducted in the Means Test. The court ruled in favor of the Trustee on this point.
The debtor tried to avoid a lien by filing an objection to the claim, but debtor did not file an adversary proceeding to challenge the lien amount. The court held that "if the debtors seek to strip off a lien, they must do so in the context of an adversary proceeding, with adequate safeguards for service, and a meaningful opportunity for hearing. In the instant case, service was not effected upon the individual or statutory agent, but only upon the corporate entity at a drop location. This is not adequate." Here, the court also warned the debtor's attorney that trying to avoid liens like this again would be "dealt with as contempt" of court.
Follows Tran
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