|Case Number||Opinion Summary ( date sorted)|
Wendelin I. Lipp
In re Davis
Mar 30, 2011
In this Chapter 20 case, the Debtors moved to avoid a wholly unsecured junior mortgage lien against their principal residence pursuant to 11 U.S.C. § 506. In opposition to the Motion and to confirmation of the Debtors’ Amended Plan, TD Bank, N.A. and the Chapter 13 Trustee encouraged the Court to adopt a per se rule making lien avoidance contingent on a debtor’s eligibility for discharge. Alternatively, TD Bank, N.A. and the Chapter 13 Trustee argued that the Debtors’ Amended Plan was not proposed in good faith and the Debtors’ case was not filed in good faith because the Debtors’ sought to strip off a lien that could not be stripped off in their prior Chapter 7 case. The Bankruptcy Court, Wendelin I. Lipp, held that a Chapter 13 debtor's ability to strip off a wholly unsecured junior lien is not conditioned on the debtor's eligibility for discharge. Rather, eligibility for discharge is one factor the Court considers in the good faith analysis at the plan confirmation stage.