Chapter 7: Lien Strip Alive in Florida!

[justbroke]

In another thread, I was anxiously awaiting a lien strip in a Chapter 7 case, happening in the Middle District of Florida (Tampa Division). Well, the first of two cases has come back and the lien strip was GRANTED.

The more interesting one will be the second one which is on the 17th of January. In that case, the creditor has posed an argument contrary to the new Appellate caselaw (In Re McNeal). This could get interesting.

(Updated to add that on the morning of 1/18/2013, the Hearing notes on the second case indicates that the motion was GRANTED!.)

Case 08-20923-8W7

It will be very interesting and I'm going to watch this case. For Reference, the case is 08-20923-8W7 and the Motion is Docket #88 (Filed 10/3/2012). The hearing is on January 15, 2013. The most interesting part is that the debtor already sought to strip the lien in a prior Chapter 13. This is exactly the pattern in my case since I also was a Chapter 13, was granted my lien strip, but then converted to a Chapter 7.

RULING: FEH on Motion to Determine Secured Status of Green Tree Servicing, LLC and to Strip Lien Effective Upon Discharge Filed by Debtor Doc #88 - Granted...

Case 12-09126-8W7

In the other case, 12-09126-8W7, the Creditor is basically telling the court to follow its own pre-McNeal rulings. That objection, from the creditor, actually has the creditor stating that "In Re McNeal should be discarded as bad law as it sets forth principles rejected by the Supreme Court in Dewsnup". Interesting argument since it's the 11th Circuit Court of Appeals that ruled in McNeal. Nice end-around attempt by the creditor. Should be interesting. (The hearing on this one is January 17, 2013.)

RULING: Debtors Motion to Determine Secured Status of Old Republic Insurance Company and To Strip Lien Effective Upon Discharge Doc #29, Objection Filed by Jay D. Passer on behalf of Creditor Old Republic Insurance Company (related document(s)[29]) Doc #30 - Granted (Updated: 1/18/2013)

Des, this should be very interesting and maybe we'll get some appeals.

[TBA]

I havent seen an update as of yet on the second case, checked pacers... still waiting. Did you go to this hearing jb? (do you do that? idk)

[IBroke]

In another thread, I was anxiously awaiting a lien strip in a Chapter 7 case, happening in the Middle District of Florida (Tampa Division). Well, the first of two cases has come back and the lien strip was GRANTED.

The more interesting one will be the second one which is on the 17th of January. In that case, the creditor has posed an argument contrary to the new Appellate caselaw (In Re McNeal). This could get interesting.

Des, this should be very interesting and maybe we'll get some appeals.

Any news on that second case? Certainly, I'm curious because as you know, my mother will be filing in about 3 weeks.

I find it funny that they are claiming that the stripping should be denied due to the legal basis PRIOR to a specific ruling. If that's how it works, laws wouldn't have to changed in the first place.

[IBroke]

BTW, does anybody know if the McNeal ruling that allows CH 7 stripping has been appealed yet?

Just curious to know how "urgent" I have to push our case forward.

[justbroke]

GMAC had an opportunity to file an appeal, but I don't know that they ever did and I can't find anything, anywhere regarding an appeal. The McNeal decision was before 3 11th Circuit judges. I think the only way now, to appeal it, is to the Supreme Court and that's not happening any time soon.

No news on the second case. The hearing was today, but I don't see anything in PACER! Not even a Pro Memo!

I would push my case forward and get it over with.

[TBA]

I thought there was a request for a hearing at the appellate level for the mcneil case and that it was scheduled and then canceled (or not scheduled and just denied) - but dont quote me on that - that was just a memory - it may be something else entirely.

We will be reopening shortly, and i will update you with our results - cross your fingers!

[justbroke]

Well, the second case has been decided. Over the objection of the creditor, in case 12-09126-8W7 (Middle District of Florida), the Motion to Strip is GRANTED!

Debtors Motion to Determine Secured Status of Old Republic Insurance Company and To Strip Lien Effective Upon Discharge Doc #29, Objection Filed by Jay D. Passer on behalf of Creditor Old Republic Insurance Company (related document(s)[29]) Doc #30 - Granted

Chapter 7 Lien Strips are ALIVE in the Middle District of Florida!!!!!

[justbroke]

I thought there was a request for a hearing at the appellate level for the mcneil case and that it was scheduled and then canceled (or not scheduled and just denied) - but dont quote me on that - that was just a memory - it may be something else entirely.

McNeal was decided at the 11th Circuit appellate level before 3 circuit judges. The only appeal would be "en banc" or to the Supreme Court. However, in McNeal, it was sent back to the lower court so I think the only choice was to wait for the lower court to rule (based on the appellate decision) and then appeal from there "en banc" or to the Supreme Court.

[alo]

I was wondering if you could explain the relevance for my case...

Filing Ch 7, have a first and small ($5K) HEL on an underwater home (by about 20%).
Current on all payments. Was planning to NOT reaffirm but stay. For now.
Does this mean the possibility of the HEL being eliminated upon my discharge?

I plan to determine the strategic foreclosure or short sale or modification possibilities after BK.
Unless attorney recommends otherwise.

[justbroke]

If you are in and filed in the Middle District of Florida, it appears that you can actually avoid (strip) a junior mortgage/lien from your property! You would need "evidence" demonstrating the value of the property. The value should reflect the market value at the time your petition was filed. Your attorney files a Motion to Determine Secured Status and Avoid Lien (which is typical in Chapter 13 cases). The motion is in no way different than one filed in a Chapter 13 case. Your attorney files with 30-day negative noticing (Local Rule 2002-4 I believe), and you just wait!

[IBroke]

Well, the second case has been decided. Over the objection of the creditor, in case 12-09126-8W7 (Middle District of Florida), the Motion to Strip is GRANTED!
Chapter 7 Lien Strips are ALIVE in the Middle District of Florida!!!!!

Thanks for your input and the great news, justbroke!

I feel much better now. So now, we have actual "case law" that supports stripping.

Together with my mother, I will be working on her BK paperwork this Sunday (gathering docs, taking care of the pre-filing course etc.). Initially, we wanted to file her 2012 tax return prior to her BK-filing - but as of today, we don't have all the documents/numbers for 2012 (i.e. her mortgage tax form won't arrive prior to February). That's why I thought we could go ahead and file next week and have the 2012 tax-return ready for the 341.

I just don't feel comfortable to drag this thing out any longer than necessary...

[bluey2]

I am currently in the process of a lien strip in Middle District of Fl. My attorneys filed the paperwork and the lien holder BOA had 30 days from the notice on 12/28/2012 to object. Just waiting to hear anything now. Oh, and the trustee has hired an appraiser to come out this next Tues. 22nd to appraise my personal belongings. I am told this is normal for the Middle District. I filed 10/30/2012, no asset, 341 was on 12/04/2012. Will update any news. I am not on Pacer, so I rely on my att. to inform me of any news.

[bluey2]

Forgot to note, this is a lien strip on the second/heloc of 14K.

[IBroke]

Forgot to note, this is a lien strip on the second/heloc of 14K.

I'm sure this will work out fine. So your second is $14K?

I guess compared to that, our second could be considered "monumental" because it exceeds $150K. I'm wondering if that amount might make the lienholder want to "fight" for it.

[justbroke]

I don't think the amount will matter for a lienholder. They are simply trying to navigate this monumental appellate decision! They would STILL have a loss if you're underwater on the first. In other words, any objection would be on principle.