HSBC Bank v. Blendheim (In re Blendheim)
HSBC Bank v. Blendheim (In re Blendheim), ___F.3d ___, 2015 WL 5730015 (9th Cir. Oct. 1, 2015). 9th Circuit Court of Appeals joins Fourth Circuit, and Eleventh Circuit, in holding that a Chapter 13 debtor can strip from secured, to unsecured, a completely underwater junior DOT loan, owed on debtor’s primary residence, in a "Chapter 20" bankruptcy case. "Chapter 20" is bankruptcy slang for a debtor first filing a Chapter 7 bankruptcy case, and receiving a discharge of unsecured debt in that Chapter 7 bankruptcy case, and then soon thereafter filing a Chapter 13 bankruptcy case (7 + 13 + 20), in which debtor is NOT eligible to receive a discharge (because the debtor has too recently had a discharge in Chapter 7) and then using the Chapter 13 case and plan to "lienstrip" the wholly underwater junior DOT loan from secured to unsecured. The US Supreme Court has not yet ruled on whether doing that is allowed.