The Supreme Court’s Ruling on Chapter 7 Lien Strips
The Supreme Court answered a question that we have asked of us quite frequently: Can I get a lien strip for my second mortgage in a Chapter 7 Bankruptcy?
Well now we have our answer: the Supreme Court says you can not. That’s right, on June 1, 2015, the Supreme Court of the United States released their opinion in Bank Of America, N.A. v. Caulkett. In their opinion, delivered by Justice Thomas, the Justices unanimously decide that a Chapter 7 Bankruptcy is no place for a lien strip on a second mortgage.
What does this mean to me?
If you are looking to file bankruptcy in the near future and you hold a second mortgage on your residence that is not secured by your home, it means you’ll need to talk to us about filing a Chapter 13 Bankruptcy. If not, well, it doesn’t mean much other than the fact something that rarely happens (a unanimous opinion of the U.S. Supreme Court), did indeed occur.
Do you have thoughts about the Supreme Court’s ruling on a Chapter 7 lien strip? Let us know below.