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In re Ginther ,(Bkrtcy.N.D.Ill.)

Bankruptcy – Wholly underwater junior mortgage lien on Chapter 13 debtors’ primary residence could be “stripped off.”
The antimodification provision of Chapter 13 did not prevent debtors from using their plan to “strip off,” as opposed to “strip down,” junior mortgage liens that were totally underwater, on residential mortgage property whose fair market value was less than the amount of the senior mortgage debt. However, the debtors had to commence an adversary proceeding in order to accomplish such a “strip off,” and could not simply file a motion or use the plan confirmation process, unless the junior mortgage lenders waived their right to an adversary proceeding by failing to object after receiving notice of the debtors’ “strip off” motions.

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