EL ECTRONI C CI TATI ON: 14 FE D App.0005P (6th Cir.) File Na me: 14b0005p.06

BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT
I n re: ANDREA M. CAI N , Debtor.

______________________________________ ) ) ) ) No. 13-8045

Appea l from the United States B ankruptc y Court for the Norther

n District of Ohio at Cleve land No. 08-15140 Submit ted : May

13, 2014
Dec ided and F iled: J uly

14, 2014
B e fo re : HA RRI SON , H UM PHR EY and PRE STO N , B ank

ru ptc y Ap pe llate Pane l Judg e s.

____________________ CO UN SEL
O N B RI E F: Cha

rl e s J. V an N e ss, Ma

y fi e ld H e ig hts , O hio , f

or Ap pe lla nt.

____________________ OP IN ION

____________________ MARIA N F . HARRISON , Ba nkruptcy Appellate Pane l J udg e.

Debtor Andrea M. Cain (the “Debtor” ) appeals t he August 9, 2013 order of the U nited States Ba nkruptcy Court for the Nor

thern District of Ohio (the “B ankruptc y Court”) de ny ing the Debtor’ s unoppos ed M o t i o n to Avoid the Mortg ag e L ien of Ame rifirst Home Improvement F inancial Company (“A merifirst”) . For

the re asons that follow, the Pane l REVERSES the B ankruptc y Court’s de nia l of the De bto r’ s Mo tio n to Av oid the Mo rt g a g e L ie n o f A me ri fi rs t.2 I. ISS UES ON APP EAL

The De btor raise s two issues in this appea l. The central and deter minative issue is whether a debtor may strip off a w holly

unsecur ed, infe rior mortg ag e lien on the debtor’ s primary residenc e in a Chapter 13 c ase f

iled less than four y ear s after having rec ei v ed a C h apter 7 discharg e. The second issue is whe ther a bankruptc y

court is bound by

the terms of a

confirme d plan.

II. JU RI SDI CT ION AN D ST AN DA RD OF RE VI EW

The B ankruptc y

Appellate Pane l of th e Si xth Ci r c u it Co u r t ( “ BA P”) has jurisdiction to decide this appeal. The United States District Court for the N orthern D istrict of Ohio has author ized

a pp e a ls t o the Pane l, and no pa rt y ha s tim e ly e le c te d to have thi s a pp e a l he ard

by the dis tr ic t c ourt

. 28 U.S.C. § 158(b)(6), (c) (1 ). A final orde r of the ba nkruptcy court may

be appe aled a s of rig ht pursuant to 28 U.S.C. § 158(a) (1). For purposes of appea l, a final order “ends the litigation on the merits and leave s nothing for the c ourt to do but ex ecute the judg ment.” Midland Asphalt Corp. v. United States , 489 U.S. 794, 798, 109 S. C t. 1 4 9 4 , 1 4 9 7 (1989) ( quotation marks and c itations omi tte d)

. “ [T]he c on c e pt of fi na lity a pp lie d to a

pp e a ls i n b ank

ru ptc y is b ro a de r a

nd mor e fl e xible than t he concept applied in or dinary civil liti g ation.” Millers Cove Energy Co., I nc. v. M oore ( In re Millers Cove Ene rgy Co., Inc. ) , 12 8 F .3 d 44 9, 45 1 (6 th C ir . 1 99 7) (c itatio ns omi tte d) . “ Th is f ina lity
re qu ir e me nt i s c on sid e re d in a mor e pr a g ma tic and less te c hn ic a l w ay in b ank ru ptc y c a se s th a n in oth e r s itu a tio ns . . . . I n ba nk ru ptc y c a se s, a fu

nc tio na l and pr a c tic a l a

pp lic a tio n [of

Se c tio n 1 58 ] is to be t he rule.” Lindsey v. O’ Brien, Tanski, Tanzer & Y oung Health Care Providers of Connec ticut ( In re Dow Corning Corp. ) , 86 F.3d 482, 488 ( 6th Cir. 1996) (quotation marks and c itation omit ted). I n bankruptc y

case s, an orde r that finally disposes of discre te disputes within a larg er c ase ma y be appea led immediately

. Id. I t appea rs that the Ba

nkruptcy Court’s order

denying the Debtor’ s motion to avoid Amerifir st’s mortga g e lien is a fina l or der be cause it was enter ed af ter the c ompletion of the De bto r’ s c on fi rm e d p lan a nd the c los ingof

he r c a se wi tho ut a

dis c ha rg e . N o o the r i ssu e s r e ma in i n the B ankruptc y

Court.3

There are no fac tual disputes, and the Ba nkruptcy Court denied the De btor’s motion based on conclusions of law . Conclusions of law ar e re viewed de novo. Corzin v. Fordu ( In re Fordu ) , 209 B.R. 854, 857 (B .A.P. 6th Ci r. 1997). “Unde r a de novo standar d of re view, the r eviewingcourt decide s an issue indepe ndently of, and wi t h o u t d efe renc e to, the trial c ourt’s dete rmination.” Me nn inge r v . A c c re dit e d H om e Le nd e rs ( In re M orgeson ) , 371 B.R. 798, 800 (B .A.P. 6th Ci r. 2007) (ci t at i on omitted). Essentially , the re viewing court de cides the issue “ as if it had not bee n hear d befor e.” Mktg. &Creative Solutions, Inc. v. Sc ripps Howard Broad. Co. ( In re Mktg. &Creative Solutions, Inc. ) , 338 B.R. 300, 302 (B .A.P. 6th Cir. 2006) (citation omitted). “No de fer ence is give n to the trial court’ s conclusions of law.” Id.

III . F AC TS

The Debtor first filed a

Chapter 7 pe tition and rece ived a discha rg e on F ebrua

ry 1, 2008. On J uly 3, 2008, the Debtor

filed the pre sent Chapter 13 c ase to pay an outstanding auto loan and ta x obligations, t o cu re t h e def ault on her f

irst mortga g e, and to avoid a wholly unsecur ed sec ond mortg ag e on her

residenc e. The Debtor’ s Amended Chapte r 13 Plan, dated Aug ust 21, 2008, was confirme d on September 18, 2008. The confirme d Chapt e r 1 3 p la n inc luded the following provision: De bto rs wi ll a

vo id t he mor tg a g e and

/or jud g me nt l ie ns of A merif ir st H ome I mprovement F inance , Squires Constru ct i o n Company , & O hio Depar tment of Taxation, which [are] wholly unsecur ed pursua

nt to 11 U.S.C . §§ 506(a) , 1322(b)( 2) & 1325( a)( 5)(B ), and w hich wholly impairs Debtors’ exemption i n t h eir residence ho me purs ua

nt t o 1 1 U .S. C. § 522( f) . Any un se c ur e d c la im f

ile d b y sa id c re dit or (s ) shall be disallowed a s discharg ed in Debtor s’ Chapter 7 B ank ru p tcy Case No. 08- 10687 filed F ebrua

ry 1, 2008 unl es s o t h er wise allowe d by a sepa rate order of the Court.

Be cause the Debtor

had re ceive d a Chapter

7 discharg e within the pre cedingfour y ear s, the Debtor w as not el i gi ble for a discharg e in her

Chapter 13 c ase. See 11 U.S.C. § 1328(f)(1)

. Acc ording ly , upon completion of the Debtor’ s pay ments under the plan, the Chapter 13 T rustee f iled his Motion for Order

ReleasingWage s and Clo s i n g Case Without a Discharg e. The Chapter 13 Tr us te e ’s mot ion

wa s g ra nte d o n M ay

6, 20 13 . O n M ay

17 , 2 01 3, th e De bto r f

ile d a Mo tio n toThe De btor in this case is known colloquially as a “ Chapter 20" debtor, having f iled a 1 Chapter 7 c ase a

nd, shortly

there afte r, a Chapte r 13 c as e. T h ere is no “Chapter 20" in the Ba nkruptcy Code. 4 Avoid Mortg ag e L ien on Real Estate ag ainst Amerifir st in order to e ffe ctuate the provisions of her confirme d Chapter 13 Plan and to a void Amerifirst’s second m ortg ag e li en on her residenc e. At the time of the Chapter 13 filing, the D ebtor’s r esidenc e wa s valued at not more than $100,800. The resi d e n c e w a s e n c u mb e r e d b y E v e r h o me M o rtg a g e Co mp an y ’ s f ir s t m o rtg a g e in

th e a mo u n t of $106,306.38 and by

Amerifir st’s second mortg ag e in the amount of $9,415.28.
No par ty -in-intere st objected to t he De btor’s Motion to Avoid Mortga g e L ien on Real Estate , howeve r, the B ankruptc y

Court denied the motion by order , dated August 9, 2013. The B ankruptc y Court held: The lien stripping power

of 11 U.S.C. § 506 is unavailable to De btor. She rec eived a Cha pte r 7 dis c ha

rg e wi thi n fo ur

y e ars of fi lin g thi s c a se and

is the re fo re ine lig ibl e for a Chapter 13 disch arg e. 11 U.S.C. § 1328(f)( 1). Pursuant to § 1325(a) (5), the lien stay s in place until dischar g e or pa y ment of the unde rlying de bt. Be cause the Debtor is inelig ible for a discharg e, the mortg ag e lien will stay in place until pay

ment of the un de rl y ingde bt.

IV . D ISC USS ION

The determinative is sue i n this appea l conce rns t he interpla y betwee n various provisions of the Ba nkruptcy Code aff

ecting“Chapter

20” debtor s. Specifica lly , the issue is whether a debtor may 1 strip off a w holly

unsecur ed, infe rior mortg ag e lien on the debtor’ s primary residenc e in a Chapte r 13 case filed less than four y ear s after

having rec eived a

Chapter 7 discha

rg e.
This question has not been a d d re s s ed b y the Six th Circuit. Two Circuit Courts and one Ba nkruptcy Appellate Pane l have c onsidered it, finding that a valu el ess lien ca n be stripped, reg ardle ss of dischar g e elig ibilit y . W ells Fargo Bank, N.A. v. Sc antling ( In re Sc antling ) , ___ F.3d

__ _, 20 14 WL27 50 34 9, a t *5 (1 1th Cir . Jun e 18 , 2 01 4) ; Bran iga n v . D av is ( In re Da v is ) , 716 F.3d5

33 1 ( 4th Cir . 2 01 3) ; F

i s e t t e v
. K e lle r ( In re Fise tte ), 455 B .R. 177, 185 (B.A .P. 8th C ir. 2011). Ba nkruptcy courts, howe ver, a

re split on the question and on their a pproac h.
A. Lien Stripp ing in Chapter 13 Case s

Under 11 U.S.C. § 1322(b)(2) a d eb t o r m ay not modify

the rig hts of “holder s of sec ured
c l a i m s ” w h o h o l d

a s e c u r i t y i n t e r e s ti nr e a l p r o p e rt y

t h a ti s t h e d e b t o r ’ s p r i n c i p a l r e s i d e n c e . In Nobelman v. Am. Sav . Bank, 508 U.S. 324, 113 S. C t. 2106 (1993), the United States Supre me Court considere d whether

a debtor could bifurc ate a

partially secur ed cla im on the debtor’s princ ipal residenc e. The Nobelman Court first determined the proper classification of a cla im as “sec ured” or “unse cure d.” Id. at 328. Finding that a claim should be cla ssified as “se cure d” if a ny portion of the c la im i s se c ur e d r e g ard le ss o f w he the r t he a mou nt o f t he c la im e xce e ds the va lue of the se c ur ity interest in the debtor’ s principal re sidence , the Nobelman Court held that the cr editor’s rig hts were fully protec ted under

the anti-modification clause in 11 U.S.C. § 1322(b)(2)

. Id.

I n Lane v. W

. Interstate Bancrop (

In re Lane ) , 28 0 F .3 d 66 3 (6 th Cir

. 20 02 ), the Sixth C ir c uit addre ssed “whe ther the implications of Nobelman would bar modification of t he rig hts of a cr editor who, although t he holder of a lien on the C hapter 13 debtor’s homestead, has solely an ‘unse cure d claim’ unde r § 506(a ).” Id. at 664. L ike the Court in Nobelman , the Lane Cou rt be g an it s ana ly sis by deter mining the pr oper c lassification of the c laim as “sec ured” or “unse cure d.” Id. at 669. Be cause the s econd mortga g e on the debtor’s principal re sidence in Lane ha d no va lue a t a ll d ue to the amount of prior liens having exceede d the value of the prope rty , the Court deter mined that the claimant held a

n unsecur ed cla im under 11 U.S .C. § 506(a) , and therefor e, 11 U.S.C. § 1322(b)(2) did not prohibit t he stripping off of the lien. Id.6 B. Lien S trippin g in Chap ter20 Cases

1. Ine lig ibil it y t o R e c e ive a D isc har ge in a Cha pt e r 20 Ca se
Pursuant to 11 U.S.C. § 1328(f ), a debtor who re ceive d a discha rg e in a Chapte r 7, 11, or 12
c ase fi led wi thin f

our y e ars of

the de bto r f

ili nga su bs e qu e nt C ha

pte r 1 3 p e tit ion

is i ne lig ibl e to
re c e ive a dis c ha rg e in t he su bs e qu e nt C ha

pte r 1 3 c a se . A pla in re a din g of 11 U. S.C. § 1 32 8( f) on ly preve nts a dischar g e. I t does not preve nt an otherw ise elig ible debtor fr om seeking a n d rec eiving Chapter 13 r elief. In re M cGhe e, 342 B.R. 256, 258 (B ankr. W.D. Ky

. 2006) (cita t i o n omitted). This rea ding is c onsistent with 11 U.S

. C

. § 1 0 9 , which does not pre clude Chapte r 13 re lief to a de bto r t hat ha s r e c e ntl y recei ved a dis c ha rg e in C ha

pte r 7 and

is i ne lig ibl e fo r a

dis c ha rg e in Chapter 13. In re Tran, 431 B.R. 230, 235 (B ankr. N .D. Cal. 2010) (c itation omit ted). More over, in Johnson v. H

ome State Bank

, 501 U.S. 78, 111 S. Ct. 2150 (1991), the Supreme Court confirmed t h at C h ap t er 20 filings a

re not pre cluded mer ely

beca use they are serial in natur e. Id. a t 8 7

. The qu e sti on pr e se nte d in

thi s a pp e a l is wh e the r t

he a bil ity of a Cha pte r 13 de bto r to str ip o ff va lue le ss liens is linked to a debtor’s e ligibility for discha

rg e.
2. Spl it of Auth ority as to Lien Strippin g in Chap ter20 Cases and t he Thr e e App r oa c he s Ta ke n by B ankr upt c y C our ts

T h e r e is a s p li t o f a

u th o r it y o n th is is s u e w h ic h h a s p r o d u c e d thr e e a

p p r o a c h es. In re J e nn ing s, 454 B.R. 252, 256-57 (B ankr. N.D. Ga. 2011) (e x plaining the three approa ches) . As stated
ear lier, only

two circ uit courts have addr essed the issue, both a dopting the third a pproac h discussed below. In re Scantling, 2014 WL 2750349 ; I n r e Da v is, 716 F.3d 331. The Six th Circuit Court of Appea ls has not addre ssed the issue.

Court s u til izing the fi rs t a pp ro a c h r e fu se to a llo w s tr ipp ingof f w ho lly un se c ur e d li e ns in Chapter 20 c ases be cause doing so would amount to a “de fa cto dischar g e.” Lindskog v. M &I Bank, 480 B.R. 916, 919 (E.D. Wis. 2012). These c ourts rely on an interpr etation of Dewsnup v. Ti mm,7

50 2 U .S. 41 0, 41 7, 11 2 S. Ct. 77 3, 77 8 (19 92 ) (h old ing that Sec tio n 506 (d ) doe s not al low a pa rt y to “ str ip do wn ” a pa

rt ia lly se c ur e d lie n) , and on Con g re ss’ inc lus ion of a dis c ha rg e re qu ir e me nt i n 1 1 U. S

. C

. § 1325(a) (5)( B) (i)(I I ). Se e, e .g ., In re Ge ra rd in , 447 B.R. 342, 352 (B ankr. S.D. F la. 2011) (“ [D] ebtor who is inelig ible for a chapte r 13 dischar g e may not strip down or strip off a lien.”) abrogated by In reScantling, 20 14 WL27 50 34 9; In re Fe nn , 42 8 B .R. 49 4, 50 0 ( B ank r. N. D. I ll. 2010) (a llowing pe rmane nt strip off of junior mortg ag e lien af ter Chapter 20 de btor completes plan

“ re su lts in a de fa c to d isc ha rg e ” ) ( c itatio n o mit te d) ; Orkwis v. MERS ( In re Or k wis ), 457 B .R. 243, 25 2 (B ank

r. E. D. N. Y. 20 11 ) (h old ing that junio r l ie n is no t r e mov e d unti l e ntr y of dis c ha rg e ); In re W initzky, No. 1:08-bk-19337- MT, 2009 WL 9139891, at *5 (B ankr. C.D. Cal. May 7, 2 0 0 9 ) ( holding that Code does not allow cour t to strip li en whe re de btor ca nnot rec eive a

discharg e).

Those cour

ts adopting the second a

pproac h allow Chapter 20 lien stripping but hold that the parties’ pre- bankruptc y

rig hts are r ei n s t at ed by operation of law af

ter the pla

n has bee n consummated. See, e .g., Victorio v. Billingslea, 470 B.R. 545, 556 ( S

. D. C al. 2012) (f inding that

a Cha pte r 2 0 d e bto r m

us t pa y de bt i n f ull duri ngc ours e of

Cha pte r 13 pl an to perman e ntl y a vo id lia bil ity on wh oll y un se c ur e d li e n) ; In re J arv is, 390 B.R. 600, 605-06 ( Ba nkr. C.D. I ll. 2008) (h old ingtha

t dis c ha rg e is a ne c e ssa

ry pr e re qu isi te to p e rm ane nc y of lie n avo ida

nc e ); In re Lilly, 378 B.R. 232, 236 (B ankr. C.D. I ll. 2007) (citation omitted) (“Wher e a de bto r does not re ceive a discharg e . . . any

modifications to a cr editor’s rig hts imposed in the plan are not perma nent and have
no bin din g e ff

e c t on c e the te rm of the pla n e nd s. ” ); In re Tru

jil lo , No. 6:10-bk-02615- AB B, 2010 WL 4669095, at *2 (B ankr. M.D. F la. Nov. 10, 2010) (sa me), aff’d sub nom. Truji llo v. BAC Home Loan Se rvicing, L.P. (

In re Tru jil lo ), 2012 WL8883694 (M.D. F la. Aug . 10, 2012), abrogated by In re Sc antling, 2014 WL 2750349.
Courts apply ing the third approa ch “allow chapte r 20 lien stripping beca use nothing in the Ba n k ru p t cy C ode pre vents it.” In re J e nn ing s, 4 5 4 B

. R

. a t2 5 7 ( c i t a t i o n s o m i t t e d )

. T h e s e c o u rts
c on te nd that the me c ha

nis m that vo ids the lie n is pla n c omp le tio n, and that Ch a pte r 2 0 c a se s e nd

in administrative closing rathe r than dismissal. See, e .g., In re Scantling, 2014 WL 2750349 , at *5 (strip off of

unsecur ed m o rt g ag e on debtor ’s principa l residenc e “is a ccomplished throug h the8

§ 506(a) valuation proc edure that deter mines that the cre ditor does not hold a sec ured c laim”); In re Da v is, 716 F.3d at 338 (holding that Chapter 20 debtor can strip a worthless lien perma nently upon
c omp le tio n o f p lan) ; Zeman v. W aterman ( In re W aterman ) , 469 B.R. 334, 339 (D . Colo. 2012) (“Chapte r 20 debtor ma

y strip off a wholly unsecur ed li en from his principal residenc e, despite be ing ine lig ibl e fo r a

dis c ha rg e .” ); In re Fa ir , 450 B.R. 853, 858 (E. D. W i s . 2 0 1 1) (c itations omi tted) (“ [T]he r e i s n o t h i n g i n t h e b an kr u p t c y c o d e w h i c h t i e s t h e m o d i f i c a t i o n o f an u n s e c u r e d l ie n to ob ta ini nga

dis c ha rg e un de r c ha

pt er 1 3. ” ); In re Fi

se tte , 455 B.R. at 185 ( citations omitt ed) (“ [N]o t h i n g i nt h e B an kr u p t c y C o d e c o n d i t i o n s a

C h a p t e r 1 3 d e b t o r ’ s a

b i l i t y t o m o d i f y a w ho lly
un se c ur e d c re dit or ’s lien un der § 1322 (b ) o n h is e lig ibi lity fo r a dis c ha rg e .” ); In re W

apshare, 492 B.R. 211, 217-18 ( Ba

nkr. S.D.N.Y. 2013) ( c it a

ti o n s o mi tt e d ) ( “ [U ]n secur ed junior mortg ag e lien is permane ntly

avoided in cha

pter 20 c ases onc e a c hapter 13 p l an i s co nfirmed a nd all plan pa y me nts have be e n ma de .” ); W on g v . G reen Tr e e Se rv ., LLC ( In re W ong) , 488 B.R. 537, 551 (B ank r. E. D. N. Y. 20 13 ) ( ho ldi ngtha t w he re c la im i s u ns ecur ed und e r § 50 6( a ), the n c la im i s
un se c ur e d w ithre sp e c t to § 1 32 2( b) (2 ) a nd § 1 32 5( a )( 5) ); In re Dolinak, 497 B.R. 15, 22-23 ( Ba nkr. D.N.H. 2013) (citation omitted) (“ Section 1 3 2 8 (f )( 1) only preve nts a cha

pter 20 de btor from
re c e ivi nga

dis c ha rg e ; it do e s n ot lim it a c ha

pte r 20 de bto r’ s ri g hts un de r § 1 32 2( b) .” ); In re Gl os te r, 459 B.R. 200, 205 (B ankr. D.N.J. 2011) (holding that lien stripping a llowed in “Chapter 20 setting so long a s a subseque nt Chapter 13 is filed in g ood faith and a plan is succe ssfully

completed.” ).

3. The De c isi ons in Nobelman and La ne Suppo r t t he Av oid anc e of Wh oll y Uns e c ur e d M or tg ag e s in C hapt e r 20 Ca se s A g rowing consensus of c ourts have followed t he thi rd approach, holding that nothing in the Code preve nts a Chapter 20 de btor from stripping a wholly u n s ec u red junior lien on the de btor’s principal re sidence . This approa ch is most consistent with t he Six th Circuit’s decision in In re Lane , 280 F.3d 663, 669, be cause it starts by deter mining the status of t he claim under 11 U.S.C. § 506(a).

I n the pre sent ca se, th e Ba n k ruptcy Court based its holding on 11 U.S.C. § 1325(a) (5)( B) , wh i ch re qu i re s t h at t h e h o l d er o f a se cu re d cl ai m re t ai n t h e li en s ec u ri n g t h e cl ai m u n t i l t h e m o rt gage is satisfied or the de btor rec eives a discharg e, whiche ver c omes first. Thus, the Ba nkruptcy Court9

deter mined that beca

use of the D ebtor’s ine ligibility for a discharg e, she must s atisfy Amerifir st’s lien in full. By faili ng to first determine the proper classification of Amerifirst’s c laim, the Ba nkruptcy Court’s decision disreg arde d the roa d map set for th in Nobelman and Lane

.

I t is undisput ed that under 11 U.S.C. § 506 Amerifir st’s lien has no value beca use the amount owed unde r th e f

ir s t mo rtg a g e e xc e e d s th e v a lu e o f th e p r o p e rty

. Co n s e qu e n tl y , p u r s u an t to the holding in Lane , Amerifir st’s claim is “unsec ured” un der 11 U .S.C. § 506(a). Id. a t 66 9. Thus , Amerifir st’s lien cannot be treated as a secur ed cla im under 11 U.S.C. § 1322(b)(2) (protec ting holders of “ secur ed cla ims” secur ed only by a sec urity interest in a de btor’s principa l residenc e). In re W ong, 488 B.R. at 551. Nor do the requirements of 11 U.S.C. § 1325(a) (5) (protecting the holder of a se cure d claim until the debt is paid or the debtor is discharg ed) a

pply

. Id.
Apply ing the rea soning se t forth in Lane to the facts of this case , the wholly unsecur ed status of Amer ifirst’s claim, rat h er than the Debtor’ s elig ibilit y for a discharg e, is deter

minative. See I

n re Scantling, 2014 WL 2750349 , at *5 (“ [S ]t rip off is a ccomplished throug h the § 506(a ) valuation proce dure that deter

mines that the cre ditor does not hold a secur ed cla im.”). No thi ngin 1 1 U .S. C. § 1 3 2 8 ( f ) ( 1 ) p r o h i b i t s a

C h a p t e r 2 0 d e b t o r

f r o m t a k i n g a d v an t a g e o f

t h e p r o t e c t i o n s an d

b e n e f i ts (other tha n discharg e) of

Chapter 13. F

r az ie r v
. R e a l T

im e R es o lu ti o n s , Inc. (

In r e F r azier ) , 469 B.R. 889, 899 (E.D . Cal. 2012) (c itation omit ted). L ien-stripping i s an i m portant tool in the Ch ap t er 1 3 toolbox , and it is not conditioned on being elig ible for a discharg e. In re J

ennings , 454 B.R. at 258 ( citations omitt ed). Se e als o I n r e Fraz ie r, 469 B.R. at 895- 96 (“[W] holly unsecur ed junior lien on the debtor’ s principal re sidence may be re moved in Chapter 2 0 ac t i o n despite the operation of § 1328(f)( 1).”) . Acc ording ly , a Chapter 20 debtor may avoid a wholly unsecur ed lien on the debtor’ s principal re sidence

.

B a se d o n th e a

bo ve , th e B ank

ru ptc y Court e rr e d by de nying the De bto r’ s Mo tio n to Av oid the Mo rt g a g e L ie n o f A me ri fi rs t.Havingdeter mined that the Debtor ’s motion to avoid lien should h av e b een g rante d, the 2 Panel dec lines to a ddress whether the Ba nkruptcy Court was bound by the Debtor ’s conf

irmed plan. 10 V. CO NC LU SION

Th e B ank ru ptc y Court ’s ho ldi ngthat th e De bto r c ou ld n ot a vo id a wh oll y un se c ur e d c la im on the Debtor ’s principal residenc e is REVERSED and REMANDED f or the e ntry

of an or der consistent with this Opini on. 2