Court of Appeals Ruling Helpful for Homeowners

Last week the 11th Circuit Court of Appeals held that a Chapter 7 debtor could strip a second mortgage lien off his home if the amount due on the first mortgage was greater than the fair market value of the home. The decision undermines the consensus view of bankruptcy courts and practitioners since the Supreme Court decision in Dewsnup v. Timm in 1992. For homeowners struggling with their mortgage payments, the decision appears to open another channel for debt relief.  In re McNeal, 2012 WL 1649853 (11th Cir. 2012).