Can someone please explain this?

[jessegirl]

Actually personal responsibility for the debt was discharged in the CH7. Reading my lien strip order, it mentions nothing about discharge, but merely states that "the junior lien-holder will remain of record until the plan is completed. "

As to the trustee not caring one way or the other, the trustee will object to any plan that is not feasible. If it is not feasible on its face (requiring a discharge that you cannot obtain), they would have to object to the plan.

I guess you'll find out when it goes before a judge for confirmation. If the the creditor does not object (really likely, there is no percentage in it for them to waste the money), the trustee does not object and the judge confirms the plan with the strip then why wouldn't it work?

The question I would ask Jessegirl, did you try to buy out the lien prior to filing CH13? You probably could have done that for about what you are going to spend during the life of CH13 with legal fees. When faced with the fact that your responsibility for the debt was discharged and they have a lien they can't foreclose on, I could see you being able to buy it out pretty inexpensively.

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Hi, no I didn't try to guy it out. I didn't have the money. My attorney tells me defiantely yes she can do this, but, everyone on here is saying no. So now i lost confidence in my attorney. I feel like she is bullshxxting cause everyone is saying no and she is saying yes.

I hope my attorney is on the up and up with me. When you don't know anything about something and you pay someone to do you right and everyone says that he cannot do it, so now i feel like he is ripping me off.

Are you goign thru the same thing right now? If so, do u mind me pming u?

[walkthaplank]

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Hi, no I didn't try to guy it out. I didn't have the money. My attorney tells me defiantely yes she can do this, but, everyone on here is saying no. So now i lost confidence in my attorney. I feel like she is bullshxxting cause everyone is saying no and she is saying yes.

I hope my attorney is on the up and up with me. When you don't know anything about something and you pay someone to do you right and everyone says that he cannot do it, so now i feel like he is ripping me off.

Are you goign thru the same thing right now? If so, do u mind me pming u?

I am in a standard CH13 and the lien strip was pretty much straight forward. Attorney moved to avoid lien, bank didn't defend, lien strip order granted. In 4 years and 8 months my lien will be stripped and my 13 will be discharged (knock on wood).

Hopefully your attorney is right, hopefully your case will go through without a hitch. Has your plan been confirmed yet? When is the confirmation hearing?

[biotechsolution]

Ok I did some research and this is what my attorney is trying to do:

This is saying that it CAN be done. Atleast this is the way I am understanding it. Just got off the phone and she says that: She included my 2nd mortgage in my chapter 7, which it was secured at the time. She is now trying to get that 2nd mortgage unsecured so that i could be inlcuded in the chapter 7 discharge. I am now in a chapter 13 to do this:

You Can Modify Or Lien Strip Your Wholly Unsecured Second Mortgage In Chapter 13 Under The Current Law
Posted by Scott Lanin on March 14, 2009
Filed Under Chapter 13 Bankruptcy, Solutions, Strategies & Alternatives

There is a powerful tool in Chapter 13 that is not widely reported. A second mortgage that is completely unsecured can be stripped in Chapter 13 and, in some cases, paid pennies on the dollar, while the homeowner keeps the home!
For example, if your home is worth $500,000 and your fiirst mortgage payoff balance is $525,000, you have no equity. If you have a second mortgage loan balance of $50,000, this second loan is a wholly unsecured mortgage. You can commence proceedings within a Chapter 13 case to strip or remove the lien. If, however, the home is worth $530,000 in this scenario, you cannot strip off the second lien because it is merely undersecured, not wholly unsecured. In other words, if the second lien is partially secured you cannot remove it. The current law (Bankruptcy Code 1322) also prohibits modification or stipping of first mortgages on residential property.

This may help homeowners with 80/20 loans or HELOCs where the 2d lien is completely underwater. If such a lien is stripped, it can be treated as an unsecured debt in the plan and paid a fraction over 5 years, just like credit cards. The actual percentage paid will depend on several factors, including the value of unencumbered assets and disposable income. It is best to have an experienced bankruptcy attorney handle this.


***Please if this does not sound right or my attorney is blowing smoke up my BUT(SORRY) please let me know, in a nice way....Reason i have an attorney obviously because I do not know anything about this and I am trusting her to do what she says can be done. If you say it cannot please voice your opinion to me. I am driving my hubby crazy and he is freaking out on me..I am so confused, upset and literally having this consume me..

Thanks

this article is right but your problem is you already have gotten a discharge in a chapter 7, which makes your inelgible for an additional discharge in a Chapter 13 if you file a Chapter 13 within 4 years of your Chapter 7.

Your attorney is right, your 2nd was included in your Chapter 7 and you are not responsible for the debt anymore BUT since a lien was filed your 2nd still has a secure interest in your home. In a chapter 7 all liens survive the discharge. Even though you don't had an obligation to the 2nd lienholder they still have an interest in the property, if you want to keep the property you either have to pay or settle.

You can strip your 2nd in the Chapter 13 filing but you have to pay the entire 2nd mortgage during the life of the plan. Because if you don't, they you are receiving a discharge of the 2nd mortgage, which you are inelgible.

When your attorney files the motion to strip the 2nd mortgage is where you get a objection from the second mortgage holder. They will simply state that since you have a dischage in a Chapter 7 within 4 years from your filing of the 13 and you are not elgible for an additional discharge. Or the objection may come directly from the judge or court clerk because this is a prohibited my the bankruptcy code.

What your attorney is doing was standard practice before the 2005 bankruptcy law changes but the law changed basically stopping discharges in a Chapter 20.

[jessegirl]

this article is right but your problem is you already have gotten a discharge in a chapter 7, which makes your inelgible for an additional discharge in a Chapter 13 if you file a Chapter 13 within 4 years of your Chapter 7.

Your attorney is right, your 2nd was included in your Chapter 7 and you are not responsible for the debt anymore BUT since a lien was filed your 2nd still has a secure interest in your home. In a chapter 7 all liens survive the discharge. Even though you don't had an obligation to the 2nd lienholder they still have an interest in the property, if you want to keep the property you either have to pay or settle.

You can strip your 2nd in the Chapter 13 filing but you have to pay the entire 2nd mortgage during the life of the plan. Because if you don't, they you are receiving a discharge of the 2nd mortgage, which you are inelgible.

When your attorney files the motion to strip the 2nd mortgage is where you get a objection from the second mortgage holder. They will simply state that since you have a dischage in a Chapter 7 within 4 years from your filing of the 13 and you are not elgible for an additional discharge. Or the objection may come directly from the judge or court clerk because this is a prohibited my the bankruptcy code.

What your attorney is doing was standard practice before the 2005 bankruptcy law changes but the law changed basically stopping discharges in a Chapter 20.

When I call he office and explain what everyone is saying, she freaks out on me and tells me shes the attorney and is sure that she can strip this. I cannot stand dealing with them and feel that how could she of not known that I was not able to do this??I fell that she just ripped me off! This attorney told me to fall behind in the 1st mortgage so that I can strip the lien on the second. I would of never have done that if I knew this was going to happen.....You know, you put your life in there hands because they are SUPPOSE to be the ones that are on the up and up with this. This attorney tells me that all she does is bankruptcies and she goes to seminars all the time and can do this....Who do I call besides them? Once I called the trustee and my attorney freaked out on me. I feel like I am stuck against a wall and jsut keep getting rocks thrown at me..She keeps saying I will not get a discharge but I am paying back the arrears. SHe says she is making it unsecured and because all my unsecured discharged in the 7 and the 2nd mortgage is put in the 7, that once I am done paying the 13 it will strip. But, obviosuly she is stabbing me in the back........What should of do? Please help....

[forgotten]

What should of do? Please help....

You have already paid the attorney, and you have already filed. There really isn't much to do now except see how it plays out.

If the lien strip order does not say it requires a discharge to strip and there are no objections you will get it stripped. If the lienholder objects, then the judge will need to decide if the strip is allowed by law or not.

You really can't change the outcome much at this point in the game... I would try your best to relax, see what happens, and hope for the best.

[jessegirl]

You have already paid the attorney, and you have already filed. There really isn't much to do now except see how it plays out.

If the lien strip order does not say it requires a discharge to strip and there are no objections you will get it stripped. If the lienholder objects, then the judge will need to decide if the strip is allowed by law or not.

You really can't change the outcome much at this point in the game... I would try your best to relax, see what happens, and hope for the best.

Thanks. So soooo hope this goes thru....

[justbroke]

Here's the scoop on these, as I've researched this relentlylessly.

• There are some Lien Strip Orders out there that do not contain language regarding the required "discharge" being entered in order for the lien strip to be effective.
• There are some Lien Strip Orders that grant the lien strip immediately!
• There are some Lien Strip Orders that don't grant the lien strip unless and until the debtor receives a discharge in the Chapter 13.
• Some of those same Lien Strip Orders include language that if the debtor's case is dismissed or converted, the lien comes back in full force and the Order has no affect.
• Due to problems with understanding the "discharge" requirement in order for the lien strip to be effective, most Courts are now requiring the Order to include language that a discharge must be entered and if the case is dismissed or converted, the lien strip is null and void.

I know that my District will no longer issue Lien Strip Orders without the "required" text.

Required Text

(a) Upon the entry of a discharge herein, the lien encompassing Claim No. XX of the Creditor shall be voided, terminated and set aside and shall not hereafter be construed to lien the above real property or any other real property interest obtained by debtor in the future.

(b) Alternatively, upon the dismissal of this case without reinstatement or conversion of this case to Chapter 7, said lien shall remain in full effect.

[walkthaplank]

Thanks. So soooo hope this goes thru....

Like forgotten says, what is done is done. Let's see how it plays out. Your attorney is right to be PO'd at you for contacting the trustee and getting outside advice. Your hired the professional to give you advice and perform a service, you can't just start mucking about in it on your own. Imagine if you were having surgery and the doctor is telling you what they are going to do and you keep coming back with "but these folks on the internet say...." or if you go back and redo your stitches because you didn't like the way the surgeon put them in.... You have chosen a course of action, see it through to the end. BTW, if your lawyer fails in this thing that is easy to do, I would demand full refund plus any damages. The term would be "malpractice and detrimental reliance" if the attorney was wrong.

Good luck and just relax, you are past the point where worrying will do any good!

[LadyInTheRed]

jessegirl,

I suggest you right a letter to your attorney confirming that she has assured you that the lien will be stripped and that if not for those assurances you would not have filed a Chapter 13. Include as much detail about her advice as possible. Ask her to let you know if you have misunderstood her. Send the letter certified mail, return receipt so you have evidence that she received it. Be sure to keep a copy of the letter. That way, if she is wrong, you will have evidence of her malpractice and your detrimental reliance.

[frankies_mom]

hi jessegirl... walkthaplank is right. there is recourse if you are misled. And I think you will turn out just fine because we are in the same exact situation. filed the 7 and discharged... now going to file a 13 for the lien strip. our attorney told us the exact same thing as yours and i am pretty sure we do not have the same attorney! he says they have been doing this the past year and everything has run clockwork. so we are going to have faith. just hang onto your retainer letter and anything else in writing that outlines the exact information you were given. i pray things go well for both of us!