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Supreme Court to hear cases regarding chapter 7 lien stripping

On Behalf of | Nov 17, 2014 | Bankruptcy, Chapter 7, Firm News, Lien Stripping

The Supreme Court granted certiorari in two Chapter 7 lien strip cases today. Cases are Bank of America v Toledo-Cardona and Bank of America v Caulkett. In the 11th Judicial Circuit, court have permitted chapter 7 debtors to strip wholly unsecured junior mortgages. Considering Minnesota was the last state to recognize lien stripping in chapter 13, nobody has even tried to strip a chapter 7 nonconsensually in Minnesota, to the best of my knowledge. But if the Supreme Court approves it, many chapter 7 debtors may be eligible for this relief.

The risk here, is that Bank of America is likely to challenge not just chapter 7 lien strips, but the ability to strip liens in other chapters.

The National Association of Consumer Bankruptcy Attorneys, of which I am a member, will certainly be involved.

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