Monthly Archives: April 2015

In 1992, the United States Supreme Court came down with a decision in Dewsnup v. Timm that has caused a stir in the Chapter 7 bankruptcy world ever since. The Court held that, under section 506(d) of the Bankruptcy Code, a Chapter 7 debtor could not “strip down” a lien to the current value of the collateral, thereby getting rid of a junior mortgage lien, when the senior debt owed exceeds the value of the collateral. In part, the Supreme Court went against lien-stripping because the Bankruptcy Act (the predecessor to the Code) provided that liens pass through bankruptcy unaffected […]