11th Circuit Allows Lien Stripping in Chapter 7 Bankruptcy Cases

On May 11, 2012 the 11th Circuit Court of Appeals ruled that debtors filing for Chapter 7 bankruptcy can strip off wholly unsecured junior mortgages and liens. In most bankruptcy districts, this remedy is only available to Chapter 13 debtors.

The case, In Re McNeal, Case No. 11-11352 (11th Cir., May 11, 2012), will most likely be appealed to the U.S. Supreme Court. But in the meantime, Chapter 7 bankrutpcy filers in the 11th Circuit's jurisdiction can use this remedy.

To learn more about this decision, see the blog post in Nolo's Bankruptcy, Debt & Foreclosure Blog.  To learn more about what lien stripping is and when you can use it, see Nolo's Your Home and Mortgage in Chapter 13 Bankruptcy topic area.