Pelley Law Office LLP
Dallas Office
Plano Office
Sherman Office

No Charge For Initial Consultation ($250 value)

Menu Contact

Over 80 Years Of Combined Experience

View Our Practice Areas

Adversary Proceedings on Mortgage Liens

Prior to confirmation, the Chapter 13 debtor in SLW Capital v. Mansaray-Ruffin filed a proof of claim on behalf of the mortgage creditor stating the debt was unsecured and in an amount of only $1,000.  Further, debtor's Chapter 13 plan included a special provision stating that the mortgage creditor's lien was avoided and the creditor held only an unsecured claim.  The mortgage creditor received notice of the proposed plan and proof of claim filed by the debtor, but failed to object prior to confirmation.  The plan was then confirmed without objection.

Nine months later, the mortgage creditor filed an adversary proceeding to determine the validity of its lien.  In upholding the rulings of the bankruptcy and district courts, the Third Circuit held that the provision in the confirmed plan could not override due process considerations that require all lien avoidance actions to be filed as adversary proceedings pursuant to the Bankruptcy Rule 7001.  Moreover, the debtor's attempt to modify the secured creditor's lien through the filing of an unsecured proof of claim violated the longstanding principle that lien holders may choose not to participate in a bankruptcy proceeding without substantively affecting their secured interests. 

No Comments

Leave a comment
Comment Information

Awards & Recognition

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Locations

Plano office
Sherman office
Dallas office

Plano Office
1312 14th Street, Suite 100
Plano, Texas 75074

Phone: 972-608-0335
Map & Directions

Sherman Office
905 North Travis Street
Sherman, Texas 75090

Phone: 903-813-4778
Map & Directions

Dallas Office
100 Crescent Court
Suite 700
Dallas, Texas 75201

Phone: 214-733-1775
Map & Directions