Can you Lien Strip after your plan has been confirmed?

[chloe0724]

The reason I ask is because when this whole thing started, our second still had about 40k secured out of the 137k we owe, now the home next door is foreclosed on and talked to the realtor yesterday, they are selling it for 169k. We owe 187k on our first. This is nuts!!!

I wonder if we could modify our plan to include them and have it stripped?

[chloe0724]

anyone?

[BnkrptcyLwyr]

Here in Michigan (and the Sixth Circuit) the answer would be a resounding no based on a case called In re Nolan.

Generally, you can do a plan modification to change the amount and timing of plan payments. Changing the classification of a claim, that's not gonna fly. When your plan was confirmed, you became bound to the value determinations which affected the secured/unsecured status of the mortgage.

[chloe0724]

That's a big let down.

[BnkrptcyLwyr]

That's a big let down.

Of course, nobody said that if your case were ... oh ... somehow dismissed ... that you can't refile and re-value the collateral so that you can strip a second mortgage.

I think I may have advised that to a client before. ;)

The client I'm thinking of was already in trouble in their prior case because of a poor pay history. The trustee had filed a motion to dismiss. We couldn't do a plan modification - just because it wasn't feasilbe. I told them, let it get dismissed! We'll refile, and this time around, I'll strip the second mortgage, which will make your plan payments more affordable. And that's what we did. I had it going good, but these clients aren't interested in paying on time at all for some reason. Their case got dismissed for failure to make payments. Sigh. All that wasted effort ... but the strategy would've worked.

[chloe0724]

Thanks for the advice, but I can't imagine having to deal with starting all over again. We can afford our payments for the mortgages and our plan, and plan on staying here for a long time. We'll just suck it up and hope that in the next 5 years, home values go back up.