Chapter 13 Mortgage Lien Strips.

[mylife]

In regards to the lien strip. On what date does the attorney pull the market value of your home? I checked the value when we first filed and it was less than the first mortgage, now it's about $1000 more.

[justbroke]

Unfortunately, the circumstances were not stated as clearly as they could have been. However, my reading was that it appeared to be a judgment lien from unsecured debt that is being addressed through the plan - as such, how can it possibly be right for such a creditor to get two bites of the apple when other unsecured creditors get only one?

It is not two bites. They took their rights under State and Federal law to get a money judgment entered and then to record the judgment making it secured. This is how it works. Unsecured debt becomes secured debt every single day in this Country through this process.

And now that I think about it, I don't see why the lien could not have been avoided, assuming the property is indeed in Florida.

Since you pay the mortgage, live in the home, and it is titled in your name (along with your mother), you should be able to use the homestead exemption to avoid the lien. This would be done by motion. However, the lien may still be attached to other personal property like cars, boats, trailers, etc.

[iv65536]

This may not be the case. The automatic stay in 11 USC 362 does not operate as a stay against "perfection of an interest in property to be effective against an entity that acquires rights in such property before the date of perfection" (11 USC 546(b) which is a Trustee power but references as an exception to the stay in 11 USC 362(a). (11 USC 362(b))

However, I'm confused by what the poster wrote because they must have the creditor listed as secured in the Plan, yet refer to being sued. This is confusing me because I don't know if this lien exists under the UCC or this is a judgment lien. Even if it's a judgment lien that was granted BEFORE the case commenced, they can still perfect it without violating the stay due to the rights in 11 USC 362(b) (11 USC 546(b)).

Furthermore, this is a pro se debtor who may have messed up the Chapter 13 by not dealing correctly with this if it is, in fact, a judgment lien... especially if it impairs the unlimited homestead exemption in Florida.

iv65536, if you start a new thread for this and send me a private message with a link to it, I'll be sure to look at it. It may be better to post this in the Pro Se section as well.

Unfortunately, the circumstances were not stated as clearly as they could have been. However, my reading was that it appeared to be a judgment lien from unsecured debt that is being addressed through the plan - as such, how can it possibly be right for such a creditor to get two bites of the apple when other unsecured creditors get only one?

And now that I think about it, I don't see why the lien could not have been avoided, assuming the property is indeed in Florida.

[justbroke]

If they did that after the BK filing, that is an egregious violation of the automatic stay; you should then have an attorney (on a contingency basis) go after them for damages and attorney fees.

This may not be the case. The automatic stay in 11 USC 362 does not operate as a stay against "perfection of an interest in property to be effective against an entity that acquires rights in such property before the date of perfection" (11 USC 546(b) which is a Trustee power but references as an exception to the stay in 11 USC 362(a). (11 USC 362(b))

However, I'm confused by what the poster wrote because they must have the creditor listed as secured in the Plan, yet refer to being sued. This is confusing me because I don't know if this lien exists under the UCC or this is a judgment lien. Even if it's a judgment lien that was granted BEFORE the case commenced, they can still perfect it without violating the stay due to the rights in 11 USC 362(b) (11 USC 546(b)).

Furthermore, this is a pro se debtor who may have messed up the Chapter 13 by not dealing correctly with this if it is, in fact, a judgment lien... especially if it impairs the unlimited homestead exemption in Florida.

iv65536, if you start a new thread for this and send me a private message with a link to it, I'll be sure to look at it. It may be better to post this in the Pro Se section as well.

[justbroke]

First, did you have Trustee permission to refinance while you are in a pending bankruptcy (Chapter 13)??? That's the first thing that you should have done. As for the "other" mysterious lien, you will need to figure it out yourself. Even if you could "strip" it, the refinance lender won't touch it because unless and until you receive a discharge in the pending Chapter 13, the lien is valid and enforceable!

The lien must be public since the Title company found it. Have you looked in the UCC Secured Transaction Registry for Florida??? I'm guessing that the lien is there. It's probably from a "finance" company that you used, like CitiFinancial, EquityOne, HSBC, etc, that you used as a "signature" loan or something. Since you indicate that you know that this company exists, because they are paid through the plan, then you must have (or should have) known that they have a "secured" debt since they are "named" in the Plan.

Florida Secured Transaction Registry (http://www.floridaucc.com/UCCWEB/)

[iv65536]

My husband filed for ch 13 bk pro se and is confirmed.

He is in his second year of the plan. We just found out that a creditor attached a lien to our house. We don't know when this happened, yet.

My husband is on the title to the house as a co-owner. His mother is the owner with the mortgage in her name, but we make the payments. We were in the process of refinancing, thru his mother of course, but the title company found the lien and now we are not closing tomorrow.

Can we get the lien stripped from the house? The creditor that attached the lien is being paid thru the plan. Then lien is for more than what the creditor sued for. We can't find the lien anywhere in our public records, we just wanted to see when it was issued.

I know my questions are all jumbled but, I'm just little frustrated. Please help.

If they did that after the BK filing, that is an egregious violation of the automatic stay; you should then have an attorney (on a contingency basis) go after them for damages and attorney fees.

[ilikchikin]

Lien question

My husband filed for ch 13 bk pro se and is confirmed.

He is in his second year of the plan. We just found out that a creditor attached a lien to our house. We don't know when this happened, yet.

My husband is on the title to the house as a co-owner. His mother is the owner with the mortgage in her name, but we make the payments. We were in the process of refinancing, thru his mother of course, but the title company found the lien and now we are not closing tomorrow.

Can we get the lien stripped from the house? The creditor that attached the lien is being paid thru the plan. Then lien is for more than what the creditor sued for. We can't find the lien anywhere in our public records, we just wanted to see when it was issued.

I know my questions are all jumbled but, I'm just little frustrated. Please help.

[smkrishna]

I am going to file for Ch.13 next week. I have been preparing for Ch.13 for last 8 months. The main reason for my Ch.13 is Lien stripping. My primary loan is $218k and I am sure that if I go for appraisal, i will get it for more than $230 or $240k. But, my attorney is very confident that we can show the assessed value (from country property appraisers website) and do the lien stripping. The reason for this is assessed value of my house is $180k. I am taking a huge risk. But, I dont see any other option as I have credit card debts also and if I dont file Ch.13 now, then Citi bank is going for Judgement on 11th January. The second loan that i am trying to strip is $126k and it's from BofA. My attorney is also giving me confidence (from his experience) that BofA will not contest for lien stripping!!!! Can any of you guys give your feedback/expert opinion on my situation? I am located at Broward country of South Florida.

[Diesel73]

Hey lilloarin,

I did get an appraisal on the home and it came in valued less than the first mortgage. The 2nd lien holder didn't contest the decision. If fact, the judge actually gave them more time to respond, but they did not. So far we've been in the plan for a few months and all is ok. I'm building my cash pad in case of emergencies and staying current with everything. Good luck with your lien strip. Our life has gotten a lot better and less stressful since we got ours confirmed.

[lilloarin]

Hey Diesel73, Congrats to you! I am awaiting my confirmation next week on Chapter 13 payment and lien strip. My 2nd lien holder is contesting. I am in CA as well and bought in 06. My first is $486,000 and second is $155,000. Was your home appraised for less than your first lien? Did your 2nd lien holder contest? Please let me know. Thanks!

[Diesel73]

Hey, just wanted to let everyone know, that I got my 2nd Lien stripped! Plan was confirmed today, and now all we have to do is make the payments!

Backstory:

Bought a house in Los Angeles in March '07 - 5 Months later the home was worth $200,000.00 less than I paid for it. We struggled with what to do for a while, then we discovered the Chap 13 Lien strip. It was a long tough road, with a lot of hard work, by us and our attorney but now it's done!

My house is now affordable, and we got rid of all the crappy consumer debt that we built up after we bought the house. All in all, I just saved myself $250,000.00!

W00T! Yay BK!

[bagoose]

i already have seen an attorney and are definatley a chapter 13 with 100 percent payback based on income and debt owed.. we dont want to keep the house because in addition to all this we are getting divorced.. will the deficite be added later to my payback? we arent even behind on the house yet so it would be a while before a sheriff sale?

[Pandora]

newbie here.. we are talking to a lawyer in Ok about a chapter 13.. we have a first mortage that we owe about 150k and a second Home equity line of credit that is about 18 k.. we are going to be in a 100 percent payback i know for sure.. can we strip the second? also coming into play we may not be keeping the house.. any advice?

First thing you need to answer is if you're keeping the house or not. If you dont owe back taxes to anyone or some other major priority along those lines - then I would try for a 7 and do a "stay and pay" so you can walk away if you need to later without recourse.

If you do decide to keep the house - then to strip the 2nd the value of the home must be less than what is owed to the 1st. This means getting a certified appraisal. Most people get a CMA or BPO - they arent as good as a cert. appraisal because they're just based on comps, square footage, county tax records and what the outside of your house looks like. Cert. Appraisals are an actual walk through of house and property.

What makes you think you'll be 100% payback? You need to do your schedules to determine your DMI. Means test is the first part of qualifying but remember you can be over median and still file Ch. 7 if you are neg. DMI.

Good luck to you!

[bagoose]

newbie here.. we are talking to a lawyer in Ok about a chapter 13.. we have a first mortage that we owe about 150k and a second Home equity line of credit that is about 18 k.. we are going to be in a 100 percent payback i know for sure.. can we strip the second? also coming into play we may not be keeping the house.. any advice?

[Pandora]

*whew* Thank GOD - I was starting to panic LOL :P Thinking to myself as I read the post "hmmm...we were just confirmed...will it change suddenly?"

I think you should become a lawyer JB - I'd hire ya! ;)