“Lien Stripping” Based on Claim Disallowance by Default: Ninth Circuit Clarifies its Rule

By Lawrence R. Ahern III, Brown & Ahern (Nashville, TN)

Introduction

Chapter 13 practitioners certainly do not need to be told that a lender with a mortgage1 on the debtor's principal residence has a special position in a Chapter 13 case. A chapter 13 plan may "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence ...."2 Under the confirmation rules in an individual mortgagor . . .

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