On four different times in the last few months, I have come across the following situation. Fortunately, only one of these was originally my own client; another person's lawyer was no longer practicing, so I helped that person out, although could not protect all of the value in question; two other cases are being handled by different lawyers, and I am waiting to see how those cases are handled.
Ask your mom!
Lien Stripping Still Possible Despite Supreme Court Case
You may have seen this headline in today's news:
"Supreme Court says homeowners underwater on loans can't void second mortgage in bankruptcy"
HOWEVER, this decision was issued in a Chapter 7 case. The case is entitled: Bank of America N. A. v.. Caulkett, and was issued June 1, 2015.
People who have to file bankruptcy often have judgments against them from before their bankruptcy case was filed. Bankruptcy discharges the personal obligation, but does not remove the judgment from the state court records.
Lien Stripping Case At Supreme Court
The United States Supreme Court may give us an answer to the following question: If you have a home with a first mortgage that exceeds the value of the home, can you use a Chapter 7 bankruptcy to "strip off" a second mortgage?
Most of the judicial circuits around the country do not permit this in a Chapter 7, although most cases DO permit a person to do this in a Chapter 13 payment plan bankruptcy.
Subprime loans were cash out, not purchase
Although not directly related to current bankruptcy practice, I thought this was interesting.
I came across an article in the New York Times, published on November 14, 2014, with the following interesting paragraph: