Spadel v. Household Consumer Discount Co. (In Re Spadel)

OPINION

EMIL F. GOLDHABER, Bankruptcy Judge:

The threshold issue in the case at bench is whether the claim of the third mortgagee is an “unsecured claim” within the meaning of section 506(a) of the Bankruptcy Code (“the Code”). We conclude that, since there is no equity in the debtors’ residence over and above the first two mortgages, the claim of the third mortgagee is unsecured pursuant to section 506(a).

The second issue presented herein is whether the debtors can avoid the lien of the third mortgagee under section 506(d) of the Code. We conclude that, since no party in interest, including…