The Supreme Court and Stripping Liens, Part 1

By M. Jonathan Hayes, Certified Bankruptcy Specialist with Simon Resnik Hayes LLP (Sherman Oaks, CA)

In Bank of America v. Caulkett, the Supreme Court will consider whether a chapter 7 debtor can strip off a wholly unsecured lien, that is a "lien [that] secures a claim against the debtor that is not an allowed secured claim." See Section 506(d).

The resolution of the issue depends, in part, on whether Congress can ever take away a lien (and give it to the debtor essentially) without compensation. That issue is discussed in Radford and

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