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Supreme Court Ducks Second Look at Ruling on Liens in Bankruptcy

Nov. 8, 2021, 2:31 PM

The U.S. Supreme Court declined an opportunity to reexamine a 1992 ruling that bankrupt debtors cannot ditch a lien on an underwater property.

The justices Monday denied a petition filed by Jesus and Penney Vasquez, who owed more than $240,000 on their mortgage at the time they filed bankruptcy in April 2019. Their home was worth only $220,000, they said.

Relying on the Supreme Court’s prior ruling in Dewsnup v. Timm, the bankruptcy court rejected the couple’s bid to reduce Wilmington Savings Fund Society FSB’s claim to $220,000, the amount the house was worth. The district court and U.S. ...