Fleysher Law Blog

Bankruptcy, Chapter 7 Bankruptcy, Second lien, Second mortgage, Strip off second lien, strip off second mortgage, Bank of America

Supreme Court Declares 2nd Liens Can’t be Stripped in Chapter 7 Bankruptcy

Banks win out after the Supreme Court ruled on Monday that homeowners cannot rid themselves of a second mortgage by filing for bankruptcy protection. All nine Supreme Court justices unanimously agreed that filing for Chapter 7 bankruptcy will not void a junior mortgage lien when the amount owed by the senior lien surpasses the current amount of the collateral if the homeowner’s claim is both allowed under the bankruptcy code

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