Following the watershed case of in re: McNeal, in which the 11th Circuit Court of Appeals ruled that fully unsecured 2nd mortgages, Home Equity Loan Liens, and other junior mortgages may be discharged and stripped off in Chapter 7 Bankruptcy, many debtors’ attorneys were unsure of how this ruling would play out with local South Florida judges covering Palm Beach, Broward, and Dade Counties. Early last month, I attended a hearing which was before Judge Olson in Broward County on this issue and he ruled that the debtor was entitled to an order granting the relief sought according to In re: McNeal. Judge Mark in Dade County reluctantly did the same. The last holdout county was in Palm Beach where, I am proud to announce, my client was granted one of the first orders of its kind by Judge Hyman. On October 10, 2012, the court entered an order granting my Motion to Value Real Property, Determine Secured Status, and Strip 2nd and third liens held by Citi and GMAC respectively. The result is that my client was able to achieve the desired result (stripping off of her junior mortgages and obtaining a full discharge of her debt) in less than 6 months. Before McNeal, this would have taken 36 months in a Chapter 13 Bankruptcy where she would have been required to make monthly payments based on her disposable income and/or the sum of her unexempt assets.
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