The defendants argued second liens should be treated as unsecured, and hence disallowed.
This is not good news for 'underwater' homeowners, however, in Chapter 13 bankruptcies removing the second mortgage or home equity line IS ALLOWED.
Tuesday, June 2, 2015
Removing 2nd Mortgage in Chapter 7 ... NOT ALLOWED
The Supreme Court ruled unanimously Monday (Bank of America v. Caulkett) debtors in a Chapter 7 bankruptcy proceeding, may not void a junior mortgage lien when the debt owed on a senior mortgage lien exceeds the current value of the collateral (in other words, the junior mortgage lien is “completely underwater).
The defendants argued second liens should be treated as unsecured, and hence disallowed.
This is not good news for 'underwater' homeowners, however, in Chapter 13 bankruptcies removing the second mortgage or home equity line IS ALLOWED.
The defendants argued second liens should be treated as unsecured, and hence disallowed.
This is not good news for 'underwater' homeowners, however, in Chapter 13 bankruptcies removing the second mortgage or home equity line IS ALLOWED.
