Avoiding Defective Mortgages In Chapter 13- The How And Why – Or How to Use your Strong Arm to Strip off a Defective Mortgage without Losing your Shirt – Part II of II

By Jan M. Sensenich, Chapter 13 Trustee for the District of Vermont

C.  HOW TO INCORPORATE §544 LIEN AVOIDANCE INTO A CHAPTER 13 PLAN

Litigating a § 544 adversary proceeding is one thing, but how does the debtor propose a plan which will take into consideration the unknown outcome of the litigation? How is the debtor protected from loss of the house to the mortgage should the adversary proceeding litigation fail?  Doing so takes some careful planning by debtor’s counsel and the trustee and some cooperation.

1.  Avoiding the res judicata bar from plan confirmation

There is case . . .

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