Senior lien strip down

[ash7051]

My house is underwater owe a lot more than my house is worth I have one senior lien is this stripped to the collateral? I know there is Supreme Court decision in chapter 7 against strip downs but that ruling seems to address junior liens vs senior only liens. My case also involves a botched hamp modification which was booked by the bank and a reported balance of $341,000 and yet citi turns around after the bankruptcy to say my liens $516,000! So I don't know what the status is on the lien

[despritfreya]

Welcome to the Forum. Unfortunately my first comment to you is: "Not going to happen". Unless you qualify for a Chapter 12 (family farmer) in the context of any other reorganization (Chapter 11 or 13) you cannot modify the rights of a lender that is solely secured by your principal residence and you certainly cannot modify any mortgage in a Chapter 7.

Des.

[ash7051]

Thanks for the response, there is unsecured and undersecured values and the usc 506... So that doesn't do anything?... And also what if the creditor in this case citi states that the lien amounts are different than what was reported?..

[justbroke]

First, what is reported to a credit bureau is not binding on anyone and may be incorrect (especially after a bankruptcy).

Second, re-read what despritfreya wrote. You simply cannot modify the rights of a Chapter 7 lienholder. The original case was Dewsnup v. Timm where the supreme court (SCOTUS) found that it's impermissible. Florida went crazy back in 2012-2014 or so allowing lien stripping on Chapter 7s. Then the cases went to SCOTUS again and SCOTUS clarified in the case titled Bank of America v. Caulkett. These cases were specifically about 11 USC 506(a).

A lien is a lien is a lien. All liens survive bankruptcy unless they are specifically voided. The only way you could actually strip down the value is if one, or more, of the claims were actually "disallowed" and therefore, void.

[ash7051]

The questions I'm pondering is
A. Dewsnup the scotus case is referring to totally or partially underwater junior liens doesn't seem to address senior only, and I have a partially underwater senior lien.

B. What exactly is considered "disallowed" under the 506 bankruptcy code. Does this mean if the lien wasn't allowed or questionable before its the same status after?

C. My lien was modified prior to the bankruptcy but it was fraudulent and botched.... Thus it is the wrong amounts owed and due.. That's the subject issue as it was booked by citi and its in district court and I won past the pleading stage but I don't know what the status is regarding the bankruptcy part.

D. Naturally the lien will have to be voided by the court or expunged by the bank. Question is the legal status of the lien because either way it will go it's still screwed... If it sails thru the estate then it was botched before the sailing, if the unsecured portion was discharged again partially unsecured senior lien then again they are claiming wrong amount owed and should be disallowed.

[justbroke]

Dewsnup was reconfirmed in an alternate context in the Bank of America Case. You'll have to read it, but you do not get to void any superior (or superpriority) lien (period) solely because it's underwater. The entire purpose of the Bank of America case was specifically about the Chapter 7 context and this is now the law. Partially secured is still secured in the context of a valid secured claim. That was the entire context of Dewsnup and reconfirmation in Bank of America.

Void means that you filed a Motion to Determine Secured Status and a judge, after a hearing and/or/trial, determined that the "claim" was not an allowed secured claim. Then and only then is the lien void once the judge issues an order deeming it void (after discharge).

Botched and void are two totally different things. It reads like you're trying the "free house" defense. I applaud you for trying, but an allowed secured claim is a valid lien. If the amounts due and owing are wrong that's doesn't make the claim or lien "void" it just makes the claim have an incorrect amount. It's not so simple to have it disallowed. Disallowance is where you can prove that the creditor/claimant does not have a claim at all; not that the amount on the claim is wrong.

Good luck.

[ash7051]

Yes I read them both, but both cases refer to junior vs senior not in a case of a just senior...the bank of America case is also a play on the anti modification Clause of the code.. Strip off /strip down... And modification took place before the bankruptcy petition..

My botched modification situation I am in court and won eight counts against citi... And there wasn't and isn't any foreclosure claims.. But I'm scratching my head over this....there is other remedies aside from bankruptcy but I want to know what goes and doesn't in chapter 7

The bank can't just pluck a number out of the hat and say that you must pay or the lien isn't released!

[ash7051]

https://scholar.google.com/scholar_case?case=2512053062296010298&q=Prepetition+undersecured+chapter+7+late+fees&hl=en&as_sdt=3,33

[despritfreya]

JB,

Unfortunately OP is looking for a way around the Bankruptcy Code by ignoring the Code's more specific provisions against modification. I have seen this before. The difference here is that OP is already in a bankruptcy - a Chapter 7. First problem is that filing a Chapter 7 was the wrong thing to do since the only Chapters that provide for any kind of redress are 11, 12 and 13, all-be-it not the redress OP wants (however, she could have filed an objection to the POC to get a judicial determination as to the amount of the debt - something she has no standing to do in a Chapter 7).

OP,

I realize you came here seeking help. The problem is that the help you are seeking simply does not exist. A mortgage lien passes through a Chapter 7 unaffected, end of story.

If you believe you have been wronged by your lender 1) you needed to list the cause of action on Schedule B and then 2) when the Trustee closes your case and abandons the "asset", take your issues back to a court of competent jurisdiction.

Please note that if you failed to disclose your claim against the lender you better amend Schedule B since, if you fail to list the claim as an asset (your claim vs the lender is an asset), no matter how far fetched the claim is, it will never be "abandoned" by the Chapter 7 Trustee and the ownership of the claim will never vest back to you.

Des.

[ash7051]

One provision jams out another.... Guess like you can find cases pro and against a issue at hand. Although the language is clear. Is the Usc 502,506 is under the automatic stay provision?

[ash7051]

Dewsnup was reconfirmed in an alternate context in the Bank of America Case. You'll have to read it, but you do not get to void any superior (or superpriority) lien (period) solely because it's underwater. The entire purpose of the Bank of America case was specifically about the Chapter 7 context and this is now the law. Partially secured is still secured in the context of a valid secured claim. That was the entire context of Dewsnup and reconfirmation in Bank of America.

Void means that you filed a Motion to Determine Secured Status and a judge, after a hearing and/or/trial, determined that the "claim" was not an allowed secured claim. Then and only then is the lien void once the judge issues an order deeming it void (after discharge).

Botched and void are two totally different things. It reads like you're trying the "free house" defense. I applaud you for trying, but an allowed secured claim is a valid lien. If the amounts due and owing are wrong that's doesn't make the claim or lien "void" it just makes the claim have an incorrect amount. It's not so simple to have it disallowed. Disallowance is where you can prove that the creditor/claimant does not have a claim at all; not that the amount on the claim is wrong.

Good luck.

So basically if it was allowed before the bankruptcy it's allowed after, if it wasn't allowed before it isn't allowed after?

[justbroke]

One provision jams out another.... Guess like you can find cases pro and against a issue at hand. Although the language is clear. Is the Usc 502,506 is under the automatic stay provision?

No, they don't. As despritfreya wrote, again, this just doesn't work in a Chapter 7. You can't find cases for and against the issue at hand. It's cut and dry, lien stripping is only available in "reorganizations" and a Chapter 7 is a liquidation, not a reorganization. See In re Talbert, 344 F.3d 555 (6th Cir. 2003)

It's simply, the law of the land. There is not trying to get around it.

So basically if it was allowed before the bankruptcy it's allowed after, if it wasn't allowed before it isn't allowed after?

That is not what I wrote. It is an allowed secured claim because there is some value 506(a) and it can't be stripped off because it is a valid secured lien 506(d). A Chapter 13 specifically modifies this ability in 11 USC 1322 (if I'm remembering correctly).

There's nothing else to discuss on this topic. It's just not going to happen especially in light of the recent Bank of America decision (extending and reconfirming Dewsnup).

Good luck.

[justbroke]

https://scholar.google.com/scholar_c...en&as_sdt=3,33

Please realize that Roland & Lynn GAGLIA, Jr. v FIRST FEDERAL SAVINGS & LOAN ASSOCIATION, 889 F.2d 1304 (1989), was before Dewsnup. Dewsnup and Bank of America are the law. Gaglia was a 3DCA case which is no longer good law after Dewsnup.

I miss my judge (who was the Chief Judge). She would have sent this back to State non-bankruptcy court and would have sent you away saying "happy hunting."