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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17223
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I am interested in stripping the unsecured portion of my first

This answer was rated:

I am interested in stripping the unsecured portion of my first mortgage in bankruptcy.
Until now I thought it wasn't possible.
I took a class about lien stripping in bankruptcy and they said only the 2nd mortgage, if fully unsecured, could be stripped (and other junior liens)

I found this order in Florida:

http://pacer.flmb.uscourts.gov/judgments/case/VAQPMA6D.pdf

As I understand it they were successful in bifurcating a loan and stripping the unsecured portion. So now I am confused. Is it possible to bifurfcate and lien strip a partially secured mortgage? I live in Utah. Are the rules different than in florida?

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.

WALLSTREETESQ :

You can lien strip a second mortgage only if the second is fully unsecured not partially unsecured, in any jurisdiction.

WALLSTREETESQ :

Be aware you have to file a chapter 13 in order to do this, it cannot be done for a chapter 7 bankruptcy case.

Customer:

okay. But doesn't that order say they bifurcated and stripped a partially secured lien though?


 

Customer:

Did I read it wrong?


 

WALLSTREETESQ :

You did not read it wrong, however this is a case that is not law across the Country or even in FL,

WALLSTREETESQ :

the 11th Circuit’s previous holding in Folendore v. United States Small Business Admin., 862 F.2d 1537 (11th Cir. 1989), concluded that an allowed wholly unsecured claim was voidable under section 506(d) in FL so the ruling would not be valid.

WALLSTREETESQ :

Also, the Court case provided is not clear to the facts of their case to see how they can to this conclusion as well, but for settled law, a lien to be stripped has to be 100% unsecured.

Customer:

interesting. I wonder if they got a default because BOA didnt' show


 

WALLSTREETESQ :

That may the reason, but the full facts of the case need to reviewed, it may not even be a primary residence, or it may be that he was a joint tenant on the property and their may have been another joint tenant.

WALLSTREETESQ :

Either way it is not precedence.

Customer:

I see. Thanks.

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