Edwin Burkhart v. Nancy Spencer Grigsby

DIAZ, Circuit Judge:

In this case, we consider whether a bankruptcy court may strip off valueless liens on a Chapter 13 debtor's principal residence when no proof of claims have been filed. The trustee opposed the debtors' request to strip the liens, arguing that 11 U.S.C. § 506 (d) 1 expressly prohibits lien avoidance where no proof of claims have been filed. The bankruptcy court agreed and refused to strip the liens. The district court affirmed, holding that even if § 506(d) did not bar the debtors' effort to strip the liens, the text of § 506(a) still requires a proof of claim to be filed…