How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Brent Blanchard Your Own Question
Brent Blanchard
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1975
Experience:  Twelve years experience in all aspects of debtor & creditor BK.
Type Your Bankruptcy Law Question Here...
Brent Blanchard is online now
A new question is answered every 9 seconds

If I reopen my ch 7 bankruptcy case, and if was able to successfully

This answer was rated:

If I reopen my ch 7 bankruptcy case, and if was able to successfully avoid the lien from my 2nd mortgage of our house that was foreclosed upon by the 1st mortgage and sold at trustee sale after the date of filing bankruptcy, then would avoiding the lien take away the 2nd mortgage lien-holder's entitlement to excess proceeds from the foreclosure sale that are held by the county treasurer here in Arizona? Do I also have legal grounds to stop the 2nd lien-holder if they assigned the right to collect the proceeds to a collection company that charges 33% contingency fee that is about $20k in excess of statutory maximum fee of $2500, and they filed their application 50 days after the 30 day period to respond to my application? I, trustor, submitted my application 190 days after complaint filed by trustee depositing funds with treasurer (thus after the 180 day period an order will not be issued to junior claimant).
I hope you didn't have to buy your own lunch as some seminar that promised some sort of "free and clear" title to a home that has not been fully paid for...

Thank you for your question.

Liens cannot be stripped in a Chapter 7 case. Dewsnup v. Timm, 502 U.S. 410 (1992).

It would appear that this case makes all of your other questions not matter much. The 9th Circuit continues to follow Dewsnup. Chapter 7 gives a discharge from personal liability for the debt, the lien continues even though it is "void" to the degree it is unsecured, and foreclosure of a senior lien extinguishes the junior lien anyway.

That risk to the lender is part of why interest rates are higher on 2nd mortgages than on first mortgages used to buy the property. It's a more risky transaction.

Thank you.


Please do not forget to click the green "Accept" button so I can receive credit for my work.
Brent Blanchard and 2 other Bankruptcy Law Specialists are ready to help you