This seems wrong to me. The antideficiency protection on purchase money loans arises from CCP 580b, which states that "No deficiency judgment shall lie in any event *after* a sale of real property..." In the context of a Chapter 13 lien strip, there is no "sale of real property," so there is no deficiency--and no loss of the right to pursue a deficiency.
The lien strip is not effective until the debtor completes their payments or receives a discharge. Accordingly, if the debtor defaults on the Chapter 13 plan payments, then the creditor will still have the right to pursue either judicial or nonjudicial foreclosure. Given that the creditor still has a contingent right to pursue foreclosure (if there is a default), I don't see how the creditor could be denied both a secured claim and an unsecured claim while the Chapter 13 case is pending
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> Mark:
> I would agree. As there was never any personal liability on the note, I cannot see any way that the stripping of the lien would create the liability.
> Pat G
> Sent from my Verizon Wireless BlackBerry
>
> -----Original Message-----
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cdcbaa@yahoogroups.com
> Date: Thu, 31 May 2012 20:29:06
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> Subject: [cdcbaa] Purchase money stripped jr trust deed proof of claim in Ch 13 as unsec creditor
>
> Purchase money junior trust deed holder lien stripped in Chapter 13. Since it was purchase money, is the stripped junior trust deed holder entitled to be paid as a class 5 general unsecured creditor on what is a nonrecourse loan? I do not believe it has a right to be paid on such a nonrecourse obligation. Thoughts?
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>
> Mark Jessee
>
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