Source: https://mediatbankry.com/2019/01/17/correcting-a-lien-avoidance-error-in-chapter-7-a-new-effort-to-overturn-dewsnup-v-timm/
Timestamp: 2019-04-19 02:36:15+00:00

Document:
You know how bankruptcy debtors can strip-away out-of-money liens in Chapters 11, 12 and 13, using 11 U.S.C. § 506?
Well . . . they can’t do it in Chapter 7. That’s because of a screw-up by the U.S. Supreme Court in an early opinion under the Bankruptcy Code—the opinion is Dewsnup v. Timm, 502 U.S. 410 (1992).
So . . . two retired judges and four law professors [Fn. 1] are urging the U.S. Supreme Court to overturn Dewsnup v. Timm in the case of Ritter v. Brady (Supreme Court Case No. 18-747—Petition for certiorari is pending).
Authorizing lien avoidance is the correct interpretation of § 506 and is settled law under Chapters 11 and 13—and should control in Chapter 7 as well.
The two judges and four professors focus on a 2015 opinion from the U.S. Supreme Court, where the Supreme Court had an opportunity to overturn Dewsnup—but did not take that opportunity.
Since the debtor merely asked the Supreme Court to distinguish Dewsnup—not overrule it—the Supreme Court had no choice but to reject the debtor’s position.
The two judges and four professors, therefore, believe that Ritter v. Brady provides an opportunity to overturn Dewsnup because the Chapter 7 debtor is making that request.
Here’s a big “Thank you” to the two retired bankruptcy judges and four law professors for taking on this overturning-Dewsnup effort.
And here’s hoping their efforts are successful!
Prof. Jack F. Williams is Professor of Law at Georgia State University and the Center for Middle East Studies Institute.
Footnote 2: Id., at 15.
Thank you for your post. As you say, this is a critical change in case law that needs to occur. Hopefully the USSC will take it up. Please keep us posted ! This could help a lot of consumers still suffering the effects of the 2009 real estate crash.

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