Friday, January 22, 2010

Avoided Liens May Be Reinstated Upon Dismissal

In re Chaudhry, 411 B.R. 282 (Bankr. E.D.Va 2009). In Chaudhry, the court distinguished between the effects of a case dismissal and the effects of a case being fully administered. The court noted that actions taken in a dismissed case may be undone, whereas actions taken in a fully administered case remain as ordered by the court. In particular, the Chaudhry court noted that liens avoided under §506(d) are reinstated if the case is later dismissed, whereas liens avoided in a fully administered case remain avoided at the conclusion of the case.

Warmest Regards,

Bob Schaller

Your Lien Stripping Defense Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm

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