U.S. Supreme Court Agrees to Review Florida Chapter 7 Lien Strip Cases

The U.S. Supreme Court agreed earlier this week that it would hear the cases of Bank of America v. Caulkett and Bank of America v. Toledo-Cardona following the bank’s appeal in both cases, which were both decided in favor of the homeowners by the 11th Circuit U.S. Court of Appeals back in May. The Supreme Court said in granting the petition on Monday that it would consolidate the two cases and allot one hour for oral arguments.

This is not good for chapter 7 debtors in Alabama, Georgia, or Florida because the Supreme Court might disagree with Eleventh Circuit decisions that currently allow lien strips in chapter 7 cases. An unfavorable decision could potentially invalidate numerous previous lien strips in chapter 7 cases in these states.

The 1992 case of Dewsnup will be clarified. Is there a distinction between strip offs and strip downs in Ch. 7 as the 11th Circuit believes, or not?  Stay Tuned.