Areas & Topics

August 2015 Archives

Supreme Court Prohibits "Stripping" Junior Liens in Chapter 7 Bankruptcy

A recent US Supreme Court decision will strengthen the position of condominiums and homeowners associations when their delinquent owners file Chapter 7 bankruptcy. Whereas, in a Chapter 13 bankruptcy, where the subject property has no equity (i.e. is "underwater"), the debtor may seek to "strip" the association's lien by filing a motion to that effect in the bankruptcy court (this varies by jurisdiction and by judge), it was not entirely clear whether the same action could be taken to strip a lien in a Chapter 7 bankruptcy.


Nagle & Zaller, P.C.
7226 Lee DeForest Dr.
Suite 102
Columbia, MD 21046

Phone: 443-535-6940
Columbia Law Office Map