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116 Banking L.J. 389 (1999)
Bankruptcy for Bankers

handle is hein.journals/blj116 and id is 391 raw text is: BANKRUPTCY FOR BANKERS
NEIL H. ACKERMAN
Although courts often state that creditors' liens pass through debtors'
bankruptcy cases unaffected, secured creditors that fail to file claims
against Chapter 11 and Chapter 13 debtors, or that do not monitor
debtors' Chapter 11 or chapter 13 bankruptcy cases, may be at some risk.
Asecured creditor can enforce its lien against collateral after a
Chapter 7 bankruptcy case or once the automatic stay is no longer
 n effect by bringing a foreclosure or replevin action in a state
Court. This is the principle that liens pass through Chapter 7 bankruptcies
unaffected.' If a creditor follows this route, a Chapter 7 debtor's bank-
ruptcy discharge will not impair its lien.2 A Chapter 7 bankruptcy discharge
extinguishes only in personal claims against the debtor or debtors, but gen-
erally has no effect on an in rem claim against the debtor's property. For
a lien to be extinguished or modified in a Chapter 7 bankruptcy case, some
affirmative step generally must be taken toward that end by the debtor or
the Chapter 7 trustee in bankruptcy.' Thus, unless appropriate affirmative
action is taken during the Chapter 7 case to avoid or pay off' a security
interest in collateral, the collateral will remain subject to the creditor's secu-
rity interest following the bankruptcy.' The simple expedient of passing
Long v. Bullard, 117 U.S. 617 (1886).
Dewsnup v. Timm, 502 U.S. 410 (1992).
See, e.g., Johnson v. Home State Bank, 501 U.S. 78 (1991).
See, e g., In re Wolf 162 B.R. 98 (Bankr. D. N.J. 1993); In re Glow, 11 B.R. 209 (Bankr. ND. Ind. 1990).
See, e.g., In re Honaker, 4 B.R 415 (Bankr. E.D. Mich. 1980).
Neil H. Ackerman is a Member of Ackerman & Terry, LLC, Westbury, NY

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