How come second mortgages cannot be stripped or discharged like it is in ch 13?
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I don't know why they can't, just that it isn't part of the bankruptcy discharge for a Chapter 7.Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions. -
Because a Chapter 7 is not a reorganization bankruptcy. It is a liquidation bankruptcy and the USSC so held that lien stripping (actually bifurcation) is not allowed:
In Dewsnup, the Supreme Court held that § 506(d) does not permit a Chapter 7 debtor to strip down an undersecured claim to the market value of the collateral, notwithstanding language in § 506(a) which bifurcates a secured creditor's claim into secured and unsecured portions. Dewsnup reasoned that the language of § 506 regarding secured claims did not overrule the longstanding principle that a lien on real property survives bankruptcy proceedings. See Dewsnup v. Timm ,502 US 410(1992)
In essence, virtually all reported decisions cite to Dewsnup and hold that you cannot strip a wholly unsecured mortgage through a Chapter 7.
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