In Re Gerardin, 447 B.R. 342

Seven debtors filed Chapter 13 cases after receiving a discharge in prior Chapter 7 cases; none is eligible for a Chapter 13 discharge.
Debtors seek to strip off junior liens on real property where senior liens exceed property value; motions to value and determine secured status filed in each case.
Court examines whether a Chapter 13 debtor with no discharge may strip or strip off a lien using 11 U.S.C. § 506 and § 1325(a)(5).
Court holds that § 506(a) valuation cannot be used to strip off or strip down a lien when the debtor is not eligible for discharge under § 1328.
Lenders have allowed secured claims surviving discharge; Johnson v. Home State Bank confirms a lien surviving discharge creates a secured claim in a subsequent Chapter 13 case.
Under § 1325(a)(5), lien modification requires plan acceptance, payment of the allowed amount, or surrender; with no discharge, lien modification cannot be completed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
May a no-discharge Chapter 13 debtor strip a lien under § 506?	Gerardin argues § 506 permits strip off based on valuation.	Trustee and lenders contend § 506 alone cannot strip a lien and requires discharge.	No; § 506 cannot strip a lien without discharge via § 1325(a)(5).
Does § 1325(a)(5) enable lien stripping when the debtor is not eligible for discharge?	Debtors argue post-discharge value and no-discharge plan can strip.	Lenders argue plan must satisfy § 1325(a)(5) conditions including discharge or surrender.	No; § 1325(a)(5) requires discharge or surrender; no discharge means no strip.
What is the status of liens surviving discharge as secured claims?	Debtors rely on valuation to defeat unsecured status.	Creditors retain secured status; Johnson shows a claim against debtor exists post-discharge.	Liens remain secured claims surviving discharge; § 506 valuation cannot void them absent discharge.

Johnson v. Home State Bank, 501 U.S. 78 (1991) (creditor's lien survives discharge creates a claim against the debtor for plan treatment)
Dewsnup v. Timm, 502 U.S. 410 (1991) (lien survives until foreclosure; § 506(d) not self-executing for liens on allowed claims)
Nobelman v. American Savings Bank, 508 U.S. 324 (1993) (protects residential mortgage rights; valuation does not automatically defeat lien rights)
In re Tanner, 217 F.3d 1357 (11th Cir. 2000) (wholly unsecured homestead liens may be stripped off contrary to Nobelman under certain conditions)
In re Hoffman, 433 B.R. 437 (Bankr. M.D. Fla. 2010) (recognizes policy considerations but upholds Dewsnup interpretation; 506(d) not universal lien remover)
In re Laskin, 222 B.R. 872 (9th Cir. BAP 1998) (Dewsnup limits § 506(d) applicability to disallowed claims)
In re Picht, 428 B.R. 885 (10th Cir. BAP 2010) (disallows lien strip off without discharge; 506(a) does not void claims)
In re Lilly, 378 B.R. 232 (Bankr. C.D. Ill. 2007) (underlying debt interpretation for nonbankruptcy context; discharge required for modification)
In re Jarvis, 390 B.R. 600 (Bankr. C.D. Ill. 2008) (no-discharge Chapter 13 cannot permanently modify creditor's rights)
In re Fenn, 428 B.R. 494 (Bankr. N.D. Ill. 2010) (disagrees with Tran; discharge required for lien stripping; 1322/1325/506 reconciled)
In re Tran, 431 B.R. 230 (Bankr. N.D. Cal. 2010) (post-discharge lien stripping in no-discharge Chapter 13; rejected by this court)