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Lien Stripping in Consumer Bankruptcy: Bringing or Defending Actions to Avoid Junior Mortgage Liens

Recording of a 90-minute CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, March 12, 2019

Recorded event now available

or call 1-800-926-7926

This CLE course will provide bankruptcy counsel with a review of how junior mortgage liens can be stripped in Chapter 13 and so-called Chapter 20 consumer bankruptcies, discuss defenses available to the lender to preserve the lien, and outline various litigation approaches for both sides.


Debtors in consumer bankruptcy aggressively seek to shed second or third mortgages through lien stripping which has become one of the more contentious issues facing consumer bankruptcy practitioners and lenders.

Although the Supreme Court prohibited lien stripping in Chapter 7 cases in Dewsnup v. Timm (1992) and Bank of America v. Caulkett (2015) of wholly unsecured consensually granted security interests--mortgages and deeds of trust--under Section 506 of the Bankruptcy Code, most courts have limited the ruling strictly to Chapter 7 and have permitted this type of lien stripping in Chapter 11 cases, Chapter 12 cases, and Chapter 13 cases. The cancelation of wholly unsecured second and third liens can even be accomplished where such liens are secured only by the debtor's principal residence. What cannot be accomplished is the reduction of the lien down to the value of the collateral if the only collateral is the debtor's principal residence.

In Chapter 13 bankruptcies, a junior mortgage no longer secured by the property's equity may be stripped. The junior mortgage becomes part of the debtor's unsecured debt and the personal liability for the debt may be discharged through the completion of a Chapter 13 plan. At the end of the plan period, the remaining unsecured debt is discharged. The wholly unsecured consensually granted mortgage or deed of trust lien can even be stripped off when discharge is not applicable (for such a circumstance where a discharge has previously been obtained).

A Chapter 20 debtor who obtained a Chapter 7 discharge less than four years before filing a Chapter 13 petition and so is ineligible to receive a Chapter 13 discharge may strip off unsecured junior liens, but that lien stripping may not be permanent absent a discharge or payment in full. But the Circuits are split, as the Fourth Circuit has held that a strip-off is permitted in Chapter 20 both as to the debtors’ principal residence and their non-homestead property.

Listen as our authoritative panel of consumer bankruptcy practitioners provides counsel with practical insights when representing debtors seeking to strip junior liens or when defending mortgage lenders seeking to preserve their liens.



  1. Debtor's ability to strip junior mortgage liens
    1. Chapter 13 requirements
    2. Adversary proceedings
    3. Chapter 7 bankruptcy options
    4. Developments in Chapter 20 proceedings
  2. Mortgage lender defenses
    1. Litigation tactics


The panel will review these and other relevant questions:

  • What circumstances permit the debtor to strip a junior lien in a Chapter 13 bankruptcy?
  • What options are available to debtors in a Chapter 7 bankruptcy?
  • What are the lender's most viable defenses?
  • When may an adversary proceeding be necessary to strip a junior lien?
  • What is the status of lien stripping in Chapter 20 proceedings?


Cope, Monette
Monette W. Cope

Junior Partner
Weltman Weinberg & Reis Co.

Ms. Cope practices in the firm’s Bankruptcy, Consumer Bankruptcy and Commercial Bankruptcy Groups. She is also...  |  Read More

Kivitz, Marc
Marc R. Kivitz

The Law Offices of Marc R. Kivitz

Mr. Kivitz has been in practice for over 30 years, representing thousands of small businesses and families, helping...  |  Read More

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