6th Cir. Bankruptcy Panel Holds Foreclosure Deficiency Judgment May Be Avoided

First posted on http://www.stopforeclosurefraud.com


The Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Sixth Circuit recently held that a mortgage foreclosure deficiency judgment lien may be avoided under 11 U.S.C. § 522(f)(2), reversing the bankruptcy court’s ruling to the contrary.

A copy of the opinion is available at: Link to Opinion.

The debtor filed a Chapter 13 bankruptcy, listing her residence in Ohio on her schedules with a value of $147,630. She also claimed the residence as exempt homestead in the amount of $132,900, the maximum allowed pursuant to Ohio law.

On her Schedule D, the debtor listed judicial or judgment liens as well as a secured claim held by the county treasurer for unpaid taxes as encumbrances on her homestead. The schedules did not reflect a mortgage on the home, but the debtor’s statement of financial affairs reflected a completed foreclosure action.

(Link to Lexology)

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