Bankruptcy invalidating liens
We therefore emphasize to all potential Chapter 7 filers that this is incorrect.In fact, a Chapter 7 discharge eliminates only the borrower’s personal liability for the loan.Others with limited income and remain eligible to file Chapter 7 petitions.When we get calls from these prospective Chapter 7 filers, their most common questions relate to keeping possession of their homes and cars.Historically, home equity lenders would typically lend the difference between a homeowner’s first mortgage balance and 80-85% of the home’s value, leaving 15-20% in an equity cushion.
This question comes up more frequently by people who have filed Chapter 7 in the past and thought their second mortgage was discharged.
Unsecured creditors had hoped to convince Glenn the assets were not covered by the lien, which would have cleared the way for them to try to recoup money that Old GM repaid to the bank. A lawyer for unsecured creditors declined to comment.
Bankruptcy Judge Martin Glenn in Manhattan sided with the bank against Old GM’s unsecured creditors, who have been trying to claw back the money, finding that most assets securing the loan, like robots and conveyor belts, were “fixtures” covered by a JPMorgan lien.
In addition to determining if the assets were fixtures, Glenn was also asked to determine the value of the equipment.
The judge rejected the bank’s proposed valuation, although he also rejected the valuation method proposed by unsecured creditors.