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ATION: 2003 FED App . 0343P (6th C ir.) File Name: 03a03 43p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
In re : T ERRY R. T ALBERT and L AHNA L. T ALBERT , Debtors.

______________________
T ERRY R. T ALBERT and L AHNA L. T ALBERT , Plaintiffs- Appellant s,

v.

C ITY M ORTGAGE S ERVICES , Defendant-Appellee. X

- - - -
> , - - - - - - - - - - N No. 02-1845

Appeal from the United States District Court for the We stern Dis trict of M ichiga n at Gran d Rapids. No. 01-00795—Richard A. Enslen, District Judge. Submitted: September 19, 2003 Decided and Filed: September 24, 2003

Befor e: SIL ER, BATCH

ELDER, and COO K, Circui t Judges. 2 In re Talbe rt, et al. No. 02-1845

_________________ COUNSEL

ON BR IEF: Marsh all A. Yee, KE MPF & YE E, Lansi ng, Michiga n, for Ap pellants.

_________________ OPINION

_________________ SIL ER, Circu it Judge. This bank ruptcy appeal presents purely a lega l questi on that has split the bankruptcy and federaldistrict courts, namely, whe ther a debtor who has filed fo r Chapter 7 bankruptcy

may avoid a va

lueless lien unde r § 506(d) of the Bankruptcy Code, 11 U.S.C. § 506( d)

. Becau se the Supreme Court’s reasoning in Dewsnup v. Timm , 502 U.S. 410 (1992), applies with equal force and logic to the issu e at hand, we hold that a Chap ter 7 debtor may not use § 506 t o “strip off” an allowed junior lien where the senior lienexceeds the fair market val ue o f the re al prope

rty in question. A ccordingly , we AFFIRM the judgment of the district c ourt.

I.
Debtors Terry

and L ahna Ta

lbert (the “Talbe

rts ” ) filed an adversary pr oc ee di ng ag ai ns t D ef en da nt Ci ty M ortgage Services (“City

Mortga ge”) t o avoid City

Mortgage’s lien

on their r esidenc e purs uant t o 11 U. S.C. § 506( d). Al thou gh properl y served with process, City Mor tgage failed

to file an
ans wer or other responsive filing in the bankruptcy cour t, a strat egy to which City Mortgage adhered before t h e district court, and continues to employ bef ore thi s court. At the hearing for def ault judg ment, the bankruptcy c ourt raised suaNo. 02-1845 In re Talbe rt, et al. 3

1 The term “ stri

p off” i s used when

a j uni or mo rtgage is totally

unse cured, whereas t he term “s trip do wn” is us ed w hen a m ortga ge is partia lly unsecur ed and p artially secu red. See In re Fit zmaurice , 248 B.R. 356, 357 n.2 (Bankr. W .D. Mo . 2000) (citation omitt ed). sponte the issue

of whether, as a

legal mat ter, § 506(d) permits the “strip off” of an allowed unsecured lien. 1

For purposes of its analysis, the cour t accepted as true that at the time of

the Talbe

rts’ ban kruptcy filing, th ey owne d a residence located in Lansing, M i chigan , which ha d a fair market value o f $ 88,000. The court also accepted that the residence was enc

umbered by a first mortga ge in the amount of $90,633, a

nd that City

Mortga ge held a jun

ior mortg age in the amount of

approxima

tely $33,110. It was thus undisputed that City Mor tgage held a

“valuel ess” lien

since the Talbert s’ propert y had a market value that was $2,633 less than the amount of the lie

n securi n g t he first mortgage. The bankruptcy

court concluded t

hat § 506( d) does not permit the “stri p off” of a valueless junior lien from real estate

. Se e Talbert v. City Mortgage Servs. (In re Talbert ) , 268 B.R. 811, 814 (Bankr. W.D. Mich. 2001). In reaching this conclusion, the cour t fo cused in large part on the claims allowanc e process , an analy

tical a ppro ach not followed by the district court, which affirmed the bankruptcy court ba s ed on the Su prem e Court’s statutory interpreta tion of § 506 as pronounced in the watershed case of Dewsnup v. Timm.

We have jurisdiction under 28 U.S.C. § 158(d). Of course, the order by the

bankruptcy c ourt, affirmed by the district court, that a junior valueless lien is not voidable by a debtor und e r 11 U.S.C. § 506(d) is a conclusion of law, which we review de novo

. Wesbanco Bank Barnesville v. Rafoth (In re Baker & Ge tty Fin. Servs. Inc.) , 106 F.3d 1255, 1259 (6th Cir. 1997). 4 In re Talbe rt, et al. No. 02-1845

II.

A. City Mortgage’s Failure to File an Appellate Brief First, we must determine wha t co nsequences, if a

ny, City Mortga ge faces f

or not fili ng a brief in

this appeal . Alt hough nota situation we confront often, on a previous occasion, we have addressed

the effects of

this unhelpful and highly risky fo rm of ap pe ll at e a dv oc ac y:
Aninitial question presented . . . is the effect of appellee Allgeier’s failure to file a brief on appeal. While Allgeier did not fi le a brief, his counsel was present at oral argument and offered to answer

any questions the pane l might have. Neither t

he F ederal

Rules of A

ppellate Procedure nor our local rules suggest that an a ppellee’s failure to file a brief should be penalized by a decision in favor of the appellant . Instea d, Fed. R. App. P. 31(c) provides in such a ca se t hat “the appellee will not be heard at oral argument except by permission of

the court.” See, e.g., H.C. by Hewett v. Jarrard, 786 F. 2d 1080, 1083 n. 1 (11th Cir.1986). Our court rules do not address this issue. . . . While Rule 31(c) a lso authorizes
us to dismiss the appeal where the appellant fails to file
a brief to support his burden of persuasion, see id., we believe that an a

ppellee 's fail

u re to file a br

ief shoul d normally carry with i t only the oral arg

ument sanction called for by the Rule. Howeve

r, we do not

address the power of the court

to impose a

dditional s anctions

should it specifically orde

r the filingof a brief and

the appellee without adequate reason fails to comply

. All geier v. United States , 909 F.2d 869, 871 n.3 (6 th Cir

. 1990) (e mphasi s in o rigina l). In th is app eal, C ity Mort gage has not flouted the a

ut ho ri ty o f t hi s c ou rt . A cc or di ng ly, pu rsua ntto Allgeier , and, like the proceedings below, a decisionin favor of the Talberts, or, in the alter native , the imposition o f some other sanction aga inst City Mortga ge, is not compelled.No. 02-1845 In re Talbe rt, et al. 5

B. “Strip Off

” in Chapter 7
The question of whether a Chap ter 7 debtor may use 11 U.S.C. § 506(d) to “strip off” a valueless junior lien from real propert y has divided the bankruptcy and fe de ral district
c ourts

. Compare Web

ster v. Ke y Bank ( In re W ebster) , 287 B. R. 703 (Ba

nkr. N.D . Ohio 2002 ); Bessette v. Bank One , Mich. (In re Bessette) , 269 B.R. 644 (Bankr . E.D. Mich. 2001); In re Dav

enport , 2 66 B. R. 78 7 ( Ba nk r. W. D. Ky. 2001); In re Fitzmaurice , 24 8 B.R. 356 (Bankr. W.D. Mo. 2000); Cunningham v. Homecomings Fin. Networ k (In r e Cunningham) , 246 B.R. 241 (Bankr. D. Md. 2000), aff’d sub

nom. Ryan v. H

omecom ings Fin. Ne twork , 253 F.3d 778 (4th Cir. 2001); Cater v. Amer ica n Gen. Fin . (In re Cater) , 240 B.R. 420 (M.D. Ala. 1999 ); I n re Virello , 236 B.R. 199 (Bankr. D.S.C. 1999 ); Swiatek v . Pagliaro (

In re Swia te k) , 231 B.R. 26 (Bankr. D. Del. 1999); Laskin v. First Nat’l Bank of Keystone (In re Laski n) , 222 B.R. 872 (B.A.P. 9th Cir. 199 8) (all finding that a debtor who has filed Chapter 7 bankruptcy

may not “strip

off” an allowed valueles s jun ior lienpursuant to 11 U.S.C. § 506(d)), with Farha v. First Am. TitleIns. (In re Far

h a) , 246 B.R. 547 (Bankr. E.D. Mich. 2000); W arth en v. Smith (In re Smith) , 247 B.R. 191 (W.D. Va. 2000), aff’d , 1 Fed. Appx . 178 (4th Cir. 2001) (unpublished

decision), overruled by

Ryan , 253 F.3d

at 782; Zempel v. Household Fin. Corp. (In re Zempel) , 244 B.R. 625 (Bankr. W.D. Ky . 1999); Yiv. Citibank (Md.) , N.A. (I

n re Yi) , 219 B.R. 394 (E.D. Va. 1998), overruled by Ryan , 253 F.3d at 782; Howard

v. National

West minister Bank, U.S. A. (Inre Howard) , 184 B.R. 644 (Bankr. E.D.N.Y. 1995) (all finding that notwithstanding the Sup reme Cour t’s decis ion in Dewsnup , a Chapte

r 7 debt or may “strip off ” an allowed secured claim if there is no value in the col lateral to cover any part of the sub

je ct lien). The Four

th Circuit i s the only federalappellate court

to discuss this debate, and it has sided with those courts that hold that § 506 does not permi t the “stripping off” of

liens in Chapter 7 proceedings. See Ryan , 253 F.3d at 78 3 (“[W ]e hold that an allowed unsecured consensual lien may no t be stripped off in a Chapter 7 6 In re Talbe rt, et al. No. 02-1845

2 Sec tion 50 6(a) pro vides in releva nt part: An allowe d claim of a credi torsecure d by a lien on p rop erty in which the estat e has an interes t . . . is a s ecured claim to the

e xtent of th e value of suchcredit or’s i nteres t in the es tat e’ s interest in such p rop erty . . . and is an unsecured claim to the extent that t

he value of suchcreditor’s i nterest . . . i s less t han the

amo unt of suc h allow ed cla im. 11 U .S.C. § 506 (a).

3 Secti on 506(d) pr ovides in pe rti nent part tha t “ to the ext en t that a lien secures a clai m agains t th e debtor that i s not an all owed secured claim, such l ien is void. ” 11 U.S.C. § 50 6(d).

4 In the T alber ts own w ord s, “[p]ur suant to the defi nit ion of a sec ured claim under

11 U.S .C. § 50 6(a) , a creditor only has a s ecured claim to the extent of th e val ue of suc h cred itor’s intere st in the estate ’s interest in

s uch pro perty. ” They c onti nue, “[i ]n t he cas e atbar, becaus e of Ap pellee ’s defau lt, it is un disput ed that the amount of the f

irst mortgage

excee ds the val

ue of Appell ant’ s resi dence. It there f ore ca nnotbe gainsa id that the App ellee d oes n ot hav e a sec ured claim.” proceeding

pursuant to the provisions of 11 U.S.C. §§ 506(a) and (d). ”). We ag

ree with the Four th Circuit.

As did the debtors in Ry an , th e Talberts argue that the secured status of a claim is determine d b y t he se cu ri tyreducing provision of § 506( a), 2 and that p ursuant t o this provision, their

junior lie n is comple

tely unsecur ed, and, thus,
acc ording to § 506(d), 3 may be “strippe d off.” 4 Se e Ryan , 253 F.3d at 781. A similar argument was rejected b y the Supreme Court in the analogous context of a debtor’s attempt to “strip down” an under-collateralized creditor’ s lien in a Chapter 7 case. In Dewsnup , the debtors owned farmland encumb ered

by deed of trust securing a debt of $120,000. The farmland was valued at approximately $39
, 000. This arrangement

left an unsecured deficiency of appro xima tely $81,000, which the

debtors so ught to a

void pursu

ant to § 506(d). The lower courts would not grant this relief, and the Supreme Court affirmed.No. 02-1845 In re Talbe rt, et al. 7

5 A claim o r interest is d eem ed “a llowed ” if pro of th er eof is time ly fi led pu rsuant t o Code § 501, a nd (1) no objec ti on is made by a p arty in interest, or (2) the bank ruptc y cour t, aft er noti ce and a hearing, det ermines the vali dity

of th e clai m, ther eby ove rruling the obj ection of a pa rty in int eres t. 11 U.S.C. § 502. Inits analy

sis, the Cou

rt laid out

i n detai l the different readin gs that coul d b e given to the thorny statutory interpretation

question presented by the perceived interplay of §§ 506(a) and 506(d). See Dewsnup , 5 02 U.S. at 414-16. One interpretation, which was urged by the debtors, was that “§§ 506(a) and 506(d) are complementar y and to be re ad tog eth er.” Id. at 414. Ac cording to this arg

ument, “[b]ecau se , un der § 506(a), a claim is secured only to the extentof the judicially deter minedvalue of

the rea l proper ty
onwhich the lien is fixed, a debtor can void a lien on the propert y pursuant to § 506(d)

to the exten

t the clai m is no longer secure d and thus i s not ‘an allowed secured claim.’” Id. Althoug

h not withou

t merit, see id. at 420-36 (Scalia, J., diss entin g) (fil ing a sharp dissent criticizing the majority for brushing aside the plain language of § 506 and e mploying an unorthodox method

of statutory interpreta

tion), this argument
was rejected in favor

of an ana lys is advanc ed by

the cre ditors, and joined by the United

States as amicus curiae , namely, that the words “‘allowed

secured claim’ in § 506(d) need not be read as an indivisibl e term of art def ined by refer ence to § 506(a), which by

its terms is not a definitional provision.” Id. at 415.
Under this constr

uction, “ allowed s ecured

claim” “ should be read term-by-term to refer to a ny claim tha

t is, first, allowed, 5 and, second, secured.” Id. (footnote added). The Courtcontinu ed, “ [b]ecause there is no question that the claim at issue here has been ‘allowed’ pursuantto § 502 of the Code and i s secure d by a lien wit

hrecour se to the under lying

c ollateral, it does not come within the scope of § 506(d), which

voids only liens corresponding to claims that have not been allowed and secured.” Id. (em phas is in 8 In re Talbe rt, et al. No. 02-1845

original). Th is read ing, the Court explained, “gives the provisionthe simple and sensible function of voiding a lien whenever a clai m sec ured by the lien itself ha s not been allowed.” Id. at 415-16. Thus, although limited to the fa cts of the case , the Cour

t’s holding

was quite cl ear: “[w ]e hold that § 506(d) doe s not allow petitioner to ‘strip down’ respondent’s lien, bec ause re spondents ’ claim is secu red by
a lien and has been f

ully allowed p

ursu ant to § 502.” Id. at 417.
Three consider

ati ons const ituted the analytical underpinning s o f the Court’s holding, namely , that: (1) any increa se in the value of the prope rt y from the date of the judiciall y determined valua

tion to the time of

the foreclosure sale should ac crue to t

he cred itor; (2)the mortg agor an d mortgagee

barga ined that a consen sual lien would rema in with the property until fore clos ur e; and (3) liens on real propert y survive bankruptcy

unaffected. Id . at 417-18. In the Court’s own words

The practical effect

of petitioner’s arg

umen t is tofreeze the creditor’s secured interest at the judicial ly det ermined valuation. By this approa ch, the creditor would lose the benefit of any increa se in the value of the property by the time of the foreclosure s ale . The increase would accrue to the benefit of the debtor, a res ul t some of the parties describe as a “windfall.”

We think . . . that the creditor’s lien stays w ith the r ea l propert y until t he foreclosure. That is what was bargained for by the mortgagor and the mortg agee. The voidne ss lan guag e sensibl y a pplies onl y to the secu rity aspect of the lie n and then

only to the re al defic iency

in the security. Any

increa se over the judicially determined valuat ionduring b ankruptc y r ightly accrue s to the be

nefit of the creditor, not to the benefit of the debtor and not to th e benefit of other unsecured creditors whose cl aim s have been allowed and who had nothing to do with the mortgagor-mortga

gee bargain. . . .No. 02-1845 In re Talbe rt, et al. 9

This result appears to have been clear ly established before the passage of the 19 78 Ac t. Under the Bankruptcy

Act of 1898, a lien on real property pas s ed throu ghbankruptcy una ffected

. This Court r

ecently
a cknowle dged

that this was so. See Farrey v. Sanderfoot , 500 U.S. 291, 297, 111 S.Ct. 182 5, 18 29, 114 L.Ed.2d 337 (1991) (“Ordina rily, lien s and other secured interests survive bankrup tcy ”); Johnson v. Home State Ban k , 501 U.S. 78, 84, 111 S.Ct. 2150, 2154, 115 L.Ed.2d 66 (1991 ) (“Rat her, a b ankru ptcy disc harge extinguishes o nl y o ne mode of enforcing a claim--
na me ly, an action against the debtor in personam --while leavingintact another--namely , an action against the debtor in rem ”). . . . Congre ss must have enacted the Code with a ful l understandingof this practice. See H.R.Rep. No. 95-595, p. 357 (1977 ), U.S .Cod e Cong. & Admin. News 1978, pp. 5787, 6313 (“Subsection (d ) perm its liens to pass through the bankruptcy case unaffected”).

WhenCongress amends the bankrup tcy laws, it does not write“on a clean slate.” See Emil v. Hanl ey , 318 U.S. 515, 521, 63 S. Ct. 687, 690-691, 87 L.Ed. 954 (1943)

. . . . [T]o attribute to Congress the intention t o grant a d eb to r t he br oa d n ew re me dy a gain st allowed claims to the exten

t that they

become “

unse cured ” for purposes of § 506(a) without the ne w remedy’ s being mentioned

somewhere in the Code itself or in the annals of Congre ss is not pla

usible, in our view, and is contrary to basic b ankruptc

y pr inciples.

Id. at 417-20.

The Supreme C ourt’s re asoning for not pe

rmitting “strip downs” in the Chapter 7 context ap plies with equal va lidity to
a debtor’ s attempt t

o effectuate a Chapter 7 “strip off.” See Ryan , 253 F. 3d at 782 (“[W]e discern no principled distin ctionto be made between the case sub judice and th a t 10 In re Talbe rt, et al. No. 02-1845

decided in Dewsnup . The Court’s reas onin g in Dewsnup is equally relevant and conv incing in a case like ours where a debtor att empts to strip off, rather than . . . strip down, an approv edbut unsecure d lien.”) ; In re Webster, 287 B.R. at 708 (“Contrary

to the Y i court’s reasoning, . . . [the ‘stripdown’ versus ‘strip-off’ distinction] is a distinction without a differenceaccording

to the majority

of court s post-

Dewsnup

. The analysis does not change depending on the availabl e equity in the col l a teral to which the lien attaches.”); In re Davenpo rt , 266 B.R. a t 790 (“We agree with the F ourth Circuit that Dewsnup’

s reasoning is equa lly

applicable in a
casewhere a debtor attempts to strip off a wholly unsecure d
consensua l m ortgage.”); In re Cater , 240 B.R. at 423 (“Alt hough the l ien at issue in Dewsnup was secured by at least some equity in the debtor’s prope rty, that fa

ctu al distinction is not relevant. Wha t is rel evant is the Supreme Court’s construction of § 506(d).”); In re Vire llo , 236 B.R. at 205 (“This Court . . . is of the opinion that for Dews nup t o have meaning , it must be a pplied toinstances of ‘strip off’ of liens as much as it does to the ‘strip down’ of liens, t h e differencebeing primarily one of de gree. ”); In re Swiatek , 231 B.R. at 2 9-30 (“A lthough in Dewsnup the claim was undersecured, not totally unsecured, we think the same r esult obt ains u nder the Dewsnup rationa le when the claim is complete ly

unsecured in a chapter 7 and no objection to the claim has been filed and sustained.” ). In f act, one court has gone so far as to describe this conclusion as “flawless.” In re Davenpo rt , 266 B.R. at 790.

As in the case of a “strip d own,” to permit a “strip off”

w ould m ark a departure from the pre- Code rule that real property liens eme

rge from bankruptcy

unaffected. Also, as inthe case of a “strip do wn,” a “strip off” would rob the mortgagee

of the ba rgain i t struck w

iththe mortgagor, i.e., that the consensual lien would remain w iththe prope

rty until foreclosure. In fact, in Dewsnup , the Court was persuaded by the creditors’ arg

ument tha

t “‘the fresh start’ policy cannot justify an impairment of

responde nts’ prop erty

rights, for the fresh start does not extend to an in rem claim ag ainst pro pertyNo. 02-1845 In re Talbe rt, et al. 11

butis limited to a disch arge o f personal liabilit y.” 502 U.S. at 416. Fina

lly , as was true in the context of “strip downs,” Chapter 7 “strip offs” also carry the risk of a “windf

all” to the debtors should the value of t he encu mbered property increa se by the time of the fore closure sale. As one court observed, “[w]ho know s what the real es t ate mark et will be tom orrow? By the time of sa le in the future, a piece of rea l estate may have increas ed in value to cover a secondmortga ge lien not covered by the property’s

value today.” In

reCater , 240 B.R . at 424; see also Ryan , 253 F.3d at 783 (“[W]e are acutely

awar e that in the volatile, modern real estate market, substantial price variations occur with weekly or monthly reg

ularities.”).

It is true that the Court’s opinion has not escape d scholar

ly criticism, see Cunningham , 246 B.R. at 246 (c ompiling law review articles that have criticized the Dewsnup d ecision), and that some c ourts have be en unwilli ng to extend Dewsnup to its logic al c onclus ion, see, e.g. , In r e Yi , 219 B.R. at 397; In re Howard

, 184 B.R. at 646. However, notw ithsta nding the dissatisfaction of some, we are not at liberty to ignore

the Supreme Court’s r

easoning , which Con

gress ha s made no apparent attem pt to modify or corre ct through legislative action. SeeVirello , 236 B.R. at 204-05 (The “Su preme Court has interpreted the statute . . . and Co ngress has made no apparent at tempt to correct that interpretation or clarify the
s tatute. Under the doctri ne of sta re deci sis, this Court i s constrained

to follow . . . D ewsnup . [ To do otherwise] . . . would effectively

render the Supre

me Court’ s reason

ing in Dewsnup meaningless.”).

Inthe instan t case, t

he Talbe rts do not c

halleng e that City Mortgage’sclaim is allowed p ursuant to § 502. Also, regar dless of the fact tha

t the current value of the real propert y is insufficient to recover City Mortgage’sjunior lien, the claim is nonetheless “secured in the ordinary sense , that is, . . . [it] is bac

ked up by

a secur ity i n terest in pr op er ty, whether or not the value of

the property suf

fices to cover

the claim.” Cater , 240 B.R. at 422. As Dewsnup teache s, that is 12 In re Talbe rt, et al. No. 02-1845

6 The bankr

uptcy court reach ed th is same c onclu sion , al thou gh by different reasoning. According to the b ankru ptcy co urt, 11 U.S .C. § 506 is meaningless i n Chapter 7 proceed ings unless the debtor is redeeming pro perty and nee ds § 506(d) to avoid any residual lien t he creditor might claim in t

he property

once the allowed secured cl aim h as bee n pai d. Bec ause the Talberts were not redeeming the property, the court reasoned that theycould no t use § 506(d) to “strip off” Cit y Mortgage’s lien on the pro perty. Th e ban krup tcy cou rt noted that § 506 (d) is need ed in reorg aniz ati on proceedings to cla s sify secu red cl aims as al lowed or disallo wed in ord er to d eterm ine who gets paid . Acco rding to the co urt, however, there is no n eed for s uch a deter minat ion in a Chapter 7 proceeding because the trustee’ s job does not include making distri butions to ho lders o f secure d claim s; a trustee ’s job in a Ch apter 7 pro ceed ing is to distribu te pro perty o f the estate, d efined as the leg al or eq uit able interests of th e debtor i n the p rop erty. 11 U.S .C. § 5 41. F rom this all that is required; the Talberts may notutilize § 506(a) and (d) to “strip o ff” City

Mortga ge’s l ien. See Dewsnup , 502 U.S. at 415 (“Becau se there is no quest

io n that the claim at issue here ha s been ‘a

llowed’ p ursuant t o § 502 of the Code and is secured by a

lien with recourse to the underly ing collater al, it does not come withi n the scope of § 506(d), whichvoids only

liens corresponding to claims that have not been allowed and

secur ed.”) ( emphasis

removed ); see also Cater , 240 B.R. at 423 (“[B]ecause [the credi tor ’s] claim is allowed under § 502 and is sec ured by a valid lie

n, the same result obtains. The fact that the value of the prope

rty is insufficient

to cover t

he debt does not warrant a different result.”).

“Section506 was in

tended to facilita te valuation and disposition of prope

rty in the re organ

izati on ch apters of the Code, not to confer an additional avoiding power on a Chapter 7 deb tor.” Ryan 253 F. 3d at 7 83 (qu otin g Laskin , 222 B.R. at 876). When a debtor proceeds under Chapter 7, creditors are “entitled t o th eir lien position until foreclosure
or other pe rmiss ib le final disposition is had.” Id. Thus, we conclude that a Chapter

7 debtor may

not use 11 U.S.C. § 506 to “ strip off” an allowed junior lien where the senior lien
ex ce ed s t he fa ir ma rk et va lu e o f t he re al pr op er ty. 6No. 02-1845 In re Talbe rt, et al. 13

definit ion, the bankruptcy court f ound tha t s ecure d cla ims do not qu alify

as property of the est ate, thus avoiding the need to classify the cl aims as all owed or di sal lowed. After reviewing t

hi s quest ion of l aw de n ovo , we agree with the district cour t t hat the more prudent analyt ical approach to resolving t he “strip-off” quest ion presented in thi s matter is to affi rm on the basis of the stat utoryint erpreta tion analys is cont ained in Dewsnup –and on tha t basis only. W e thus express no opinion o n the bankrup tcy court’s analysis. AFFIRMED.