1st Jun 2015
The Supreme Court released its decision in Bank of America, N.A. v. Caulkett. The Court held that wholly unsecured junior mortgage liens cannot be voided pursuant to Section 506(d) and refused to limit the holding in Dewsnup v. Timm, (502 U. S. 410) to partially underwater liens. Per the Court:
Held: A debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the creditor’s claim is both secured by a lien and allowed under §502 of the Bankruptcy Code.
Full opinion here
For information on how this can affect your chapter 7 bankruptcy, contact the Semmes Law Firm today!