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The Game Is Over For Chapter 7 Lien Stripping In Georgia, Alabama And Florida

By Scott Riddle on June 8, 2015
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EraseMortgage_iSTockFor the past couple of years one of the benefits of being in the 11th Circuit states (Georgia, Florida and Alabama) is that you could strip an unsecured junior lien from a house.  These states were the only states in which this was available and it was because a higher court approved it.  This all came to an abrupt end on June 1, 2015 when the United States Supreme Court overruled the 11th Circuit and said the 11th Circuit was not properly following the law.  A detailed analysis of the law is generally beyond the scope of this site, but you can read a more detailed discussion of Bank of America, N.A. v. Caulkett, No. 13-1421 (June 1, 2015) by clicking here.

If you are one of the fortunate people who were able to take advantage of this benefit, how does the recent decision affect you?  Most likely, it does not affect your case at all.  Supreme Court cases like this are generally affective after the opinion is entered and do not relate back to prior cases.  Even if a lien stripping order was entered by the Bankruptcy Court just a few days before the Supreme Court order was entered, as long as the lender did not timely appeal or request reconsideration the lien is stripped.  It is important to note that the Supreme Court did not rule that lien stripping was, in any way, unconstitutional.  They merely interpreted the law and anytime Congress chooses to allow lien stripping in a Chapter 7 case they can change the law.

Photo of Scott Riddle Scott Riddle

Scott Riddle has over thirty years’ experience in Bankruptcy and business and real estate litigation and has represented individuals and businesses throughout Georgia and several other states. Scott graduated from The University of North Carolina at Chapel Hill with a BSBA in 1987…

Scott Riddle has over thirty years’ experience in Bankruptcy and business and real estate litigation and has represented individuals and businesses throughout Georgia and several other states. Scott graduated from The University of North Carolina at Chapel Hill with a BSBA in 1987 and received his JD, with honors, in 1991 from the UNC School of Law. After graduation from law school, Scott served as a judicial law clerk for Judge W. Homer Drake, Jr., United States Bankruptcy Judge for the Northern District of Georgia. He then spent several years in the Bankruptcy and litigation sections of a large international law firm based in Atlanta prior to starting his own firm.

Scott is admitted to practice before the Supreme Court of Georgia, Georgia Court of Appeals, Eleventh Circuit Court of Appeals, and U.S. District and Bankruptcy Courts for the Northern, Middle and Southern Districts of Georgia. He has also been admitted to practice pro hac vice in the courts of several other states.

Scott has spoken at several continuing education seminars, and in the community, has been a member of the Kiwanis Club, Buckhead Business Association, Rotary Club and North Point Community Church. He has been cited in several publications, including the Wall Street Journal Online, Atlanta Journal-Constitution, Atlanta Business Chronicle, Fulton County Daily Report, and CNN.com. Scott is a member of the State Bar of Georgia (Bankruptcy and Litigation Sections), served several terms on the Board of Directors of the Bankruptcy Section of the Atlanta Bar Association, and is a member of the Georgia Chapter of the Turnaround Management Association and the American Bankruptcy Institute.

Away from the office, Scott is very active in his community. In addition to volunteering with local charities, Scott has participated and led mission and relief trips to orphanages in Russia and Romania, conducted English camps in Romania and Poland, participated in earthquake relief projects in Haiti, and participated in, and helped organize, an earthquake relief trip to Chile. He also supports Lighthouse Family Retreats, and participates in weekend retreats for children suffering from cancer and their families.

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  • Posted in:
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  • Blog:
    Georgia Bankruptcy Law Network
  • Organization:
    The Law Office of Scott B. Riddle
  • Article: View Original Source

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