Please help: order to reclassify creditor as general unsecured creditor

[blizzard07]

Hi, I filed a Chapter 13 in 2010.
I did a lien strip, order to reclassify creditor as general unsecured creditor.

The case was dismissed in 2011.
This almost 14 years ago.

The order was received. There is nothing on it saying it would reverse back to being secured. (new ones do)
The dismissal says nothing about it becoming secure again.
It was filed with the county as not being secured.
I have since refinanced my house.
Title company had nothing to say about it.
I know they can come after the money.

About a year ago, It looks like the note was sold and now they are foreclosing on my house.
Everything I remembered and researched. The order does not reverse and it stays unsecured.

I remember, this was changed in 2013. Because people were doing a Chapter 13 then getting it dismissed just to make the second unsecured.
Please help

[despritfreya]

If you did not complete the Chapter 13 and the case was dismissed, you did not get rid of the lien.

A dismissal puts the parties back to where they were prior to the filing. You had to complete the Chapter 13 and get a Discharge to effectuate a lien removal.

See 11 U.S. Code § 349 (effect of a dismissal) and as far as I know, this has been the law for eons with the last change dating back to 1994:

(b) Unless the court, for cause, orders otherwise, a dismissal of a case. . . (1) reinstates. . . (C) any lien voided under section 506(d) of this title;

Des.

[despritfreya]

If you did not complete the Chapter 13 and the case was dismissed, you did not get rid of the lien.

A dismissal puts the parties back to where they were prior to the filing. You had to complete the Chapter 13 and get a Discharge to effectuate a lien removal.

See 11 U.S. Code § 349 (effect of a dismissal) and as far as I know, this has been the law for eons with the last change dating back to 1994:

(b) Unless the court, for cause, orders otherwise, a dismissal of a case. . . (1) reinstates. . . (C) any lien voided under section 506(d) of this title;

Des.

[justbroke]

The case was dismissed in 2011.

The dismissal says nothing about it becoming secure again.

A dismissal in a Chapter 13 resets the parties back to where they were the day before the case was filed.

About a year ago, It looks like the note was sold and now they are foreclosing on my house. Everything I remembered and researched. The order does not reverse and it stays unsecured.

An order dismissing a Chapter 13 doesn't have to say anything other than the case is dismissed and list whether it's with prejudice or has any limitations on refiling. As despritfreya wrote, the bankruptcy code automatically does this, as an operation of law, under 11 USC 349. As such, those liens are reinstated under operation of statute.

I remember, this was changed in 2013. Because people were doing a Chapter 13 then getting it dismissed just to make the second unsecured.

I have never heard of such a thing. This simply doesn't work. What you write is not the law in any of the bankruptcy courts.

I list seminal case on this from New York in 2011 which clearly references many other cases which make it clear; liens stripped under 546(d) are automatically reinstated by operation of a dismissal.

"If a case is dismissed, the case is not fully administered. Actions taken may be undone. Avoided transfers are reinstated, liens avoided under § 506(d) are reinstated and certain orders entered in the case are vacated. Property of the estate is revested in the entity in which the property was vested immediately before the commencement of the case." In re Miller, 462 B.R. 421, 432 (Bankr. E.D.N.Y. 2011)

This history shows that "... cases in this chapter 13 lien strip off area note that if a case is dismissed then, under § 349, any lien voided under § 506(d) shall be reinstated." In re Miller, 462 B.R. 421, 433 (Bankr. E.D.N.Y. 2011)

[MyAZLawyers]

It sounds like you’ve been dealing with a complicated situation since your Chapter 13 case was dismissed. Generally, when a lien strip order is issued in a Chapter 13 case, it removes the lien, classifying the debt as unsecured. However, if the case was dismissed without any clear language regarding the reversal of that order, it’s important to review the specific details of the dismissal. If the creditor has since sold the note and is now foreclosing, it may be necessary to consult with a bankruptcy or foreclosure attorney to understand how the dismissal affects your case.