[CLBS] Lien avoidance in a Chapter 20 case

[Alexandra Caval]

Caulkett (the Supreme Court Decision) involved a chapter 7 debtor that was
trying to avoid a wholly unsecured junior mortgage under 506(d) but the
Supreme Court held that Dewsnup was still good law (although the Supreme
Court noted more than once that they weren't being asked to overrule
Dewsnup). Caulkett was a reaffirmation of Dewsnup under the facts presented
which was limited to Chapter 7. Chapter 13 on the other hand, allows lien
avoidances (Nobleman vs. American Savings) under 1322(b)(2) & 506(a). In the
context of chapter 20 cases the debate has always been whether you can avoid
a mortgage lien when the debtor is not going to get a discharge in the case
as well as the timing of the avoidance (confirmation vs. completion vs.
discharge).  The BAP adopted the view of the courts that have held permitted
lien avoidance in chapter 20 cases "because nothing in the Code prevents it"
and found that plan completion was when the avoidance became permanent
because it leads to administrative closure of the case. Basically, Caulkett
and Boukatch involve very different issues that don't really overlap.


-----Original Message-----
From: James Meservy [mailto:jcmeservy at cableone.net] 
Sent: Monday, July 13, 2015 11:21 AM
To: 'Alexandra Caval'; CLBS at admws.idaho.gov
Subject: RE: [CLBS] Lien avoidance in a Chapter 20 case

Alex , how does that, can that, square the with Supreme Ct case of approx. 1
mo/6 weeks ago?

-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Alexandra
Caval
Sent: Monday, July 13, 2015 10:56 AM
To: CLBS at admws.idaho.gov
Subject: [CLBS] Lien avoidance in a Chapter 20 case

Last week the 9th Circuit BAP held that in Chapter 20 cases (a chapter 13 on
the heels of a chapter 7 case) the debtors can avoid a wholly unsecured
second mortgage and that the avoidance occurs at the completion of the plan.

 

Alexandra O. Caval

Caval Law Office, P.C.

P.O. Box 1716

Twin Falls, ID 83303-01716

T: 208.733.2035

F: 208.733.3919

 <mailto:alex at cavallawoffice.com> alex at cavallawoffice.com

 

 

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