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Bankruptcy Law/Ch.13 after Ch.7 Bk

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Expert: Mark J. Markus- California Bankruptcy Attorney - 8/31/2009


Question
I live in Orange County CA. Is it possible to file Ch.13 after a discharged Ch.7 in order to strip down a second mortgage not covered by the value of the home (primary residence)? Is it possible to strip-down the loan on a rental property to the market value of the rental home? I have heard that in some cases the courts have not allowed a Ch.13 strip-down immediately after Ch.7.As I understand, the 2nd lean is already discharged in the Ch.7. What would happen to Ch.13 discharge if there is no loan left to be discharged?

Answer
The Judges in the San Fernando Valley Division of the Central District of California recently ruled that you cannot strip a lien in a Chapter 13 after a Chapter 7 discharge (known commonly as a "chapter 20") where there will be no discharge in the Chapter 13 case.   I suspect the orange county judges would follow this since it's in the same District.

Most likely you could strip the lien in a Chapter 13 case filed more than 4 years after the prior Chapter 7 case, but that issue hasn't been ruled on yet.

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

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Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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