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Simple English definitions for legal terms

lien-stripping

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A quick definition of lien-stripping:

Lien-stripping is a practice used in bankruptcy where a mortgagee's secured claim is split into secured and unsecured components. This allows the debtor to modify the terms of the mortgage and reduce the amount of debt to the market value of their residence. However, the U.S. Supreme Court has prohibited lien-stripping in all Chapter 7 cases and in Chapter 13 cases involving a debtor's principal residence. The Bankruptcy Reform Act of 1994 also modified the Bankruptcy Code to prohibit lien-stripping in Chapter 11 cases involving an individual's principal residence.

A more thorough explanation:

Definition: Lien-stripping is a practice in bankruptcy where a mortgagee's secured claim is divided into secured and unsecured components. The claim is then reduced to the market value of the debtor's residence, allowing the debtor to modify the mortgage terms and reduce the debt amount.

For example, if a debtor owes $200,000 on a mortgage for a home that is now worth $150,000, lien-stripping would split the claim into a secured portion of $150,000 and an unsecured portion of $50,000. The unsecured portion can be discharged in bankruptcy, and the debtor can modify the mortgage terms on the remaining secured portion.

However, the U.S. Supreme Court has prohibited lien-stripping in all Chapter 7 cases and in Chapter 13 cases involving a debtor's principal residence. The Bankruptcy Reform Act of 1994 also modified the Bankruptcy Code to prohibit lien-stripping in Chapter 11 cases involving an individual's principal residence.

These examples illustrate how lien-stripping works and the limitations on its use in bankruptcy cases.

lien state | lien waiver

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windyMagician
11:09
shaq hows ur love life going? any updates?
shaquilleoatmeal
11:14
damn couldnt even get to Christmas dinner before this question lmao im not looking for anything serious rn so no updates lol
11:14
i made out with my ex in a stairwell the other day if you care. my only update
shaquilleoatmeal
11:14
oof
shaquilleoatmeal
11:14
twitter ex or a different ex
11:15
different ex
windyMagician
11:15
since its not Twitter dude I'll forgive it
shaquilleoatmeal
11:17
at least you did that before the new year, cant carry that baggage in 25
11:17
I think he thinks if I move to nyc we’re going to get back together
11:17
that’s not my plan tbh
jackfrost11770
11:18
this is so funny
shaquilleoatmeal
11:19
lmao damn wish id be classmates with this dude
shaquilleoatmeal
11:20
@cheriebomb: you never know what the future holds
jackfrost11770
11:20
also cherie fallen soldier
jackfrost11770
11:20
i got home at 8 am from the club and my neighbor was leaving to go biking. truly living in different worlds
11:20
i don’t fw him that heavy tbh
11:21
i get along better with his friends than i do with him
windyMagician
11:21
nah the hiking in Nike blazers deserves jail time
11:21
he was already vomiting and shitting in a hole I think he did his penance
windyMagician
11:26
call that restorative justice
11:35
they put a place in the UK second. I don’t trust their methodology
shaquilleoatmeal
11:35
im laughin cause it definitely isnt but the fact that some people this it is is comical
shaquilleoatmeal
11:35
tink*
shaquilleoatmeal
11:35
think jee
shaquilleoatmeal
11:35
jeez - im over it
11:37
imagine saying you want to go to boston for christmas 💀
shaquilleoatmeal
11:40
imagine you not wanting to go what lmao
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