Goff & Goff Wins Contested Chapter 13 Confirmation HearingBankruptcy | 06.18.14
In Chapter 13 cases, a debtor can "strip off" junior mortgages if he can prove that the mortgage in question does not attach to any equity in his property. At the June 6, 2014 hearing in front of Judge Campbell, two competing appraisers testified regarding the value of the debtor's homestead property. At the hearing it became clear that the creditor's appraiser had done a "drive by" appraisal and then falsely claimed during his testimony that he had been "denied access" to the debtor's property to perform a full appraisal. By contrast, the debtor's appraiser established that he was familiar with the area, and he performed a complete, in-person appraisal. Judge Campbell found that he held up well under cross examination. The Judge found the debtor's appraiser more credible and agreed with his valuation, paving the way for confirmation of the debtor's plan and the strip off of a $150,000 deed of trust from their property. Lien stripping is a powerful tool in Chapter 13 but winning contested cases requires careful preparation and thorough and credible appraisals.