Tenth Circuit on Woolsey

By Kevin R. Anderson, Chapter 13 Trustee for the District of Utah

The Tenth Circuit ruled that the lien strip of wholly-unsecured Trust Deed on a debtor’s residence cannot be accomplished through § 506(d) but might be possible under § 1322(b)(2).

The Adversary Proceeding: As part of their Chapter 13 case, the Woolseys filed an adversary proceeding to avoid the second trust deed of Citibank as being wholly-unsecured. However, the complaint also sought an order requiring the bank to forthwith file a Deed of Reconveyance with the county recorder’s office. The bank did not respond . . .

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