Many people, especially senior citizens, are declaring bankruptcy on manufactured home mortgages as they lose their jobs. They are discovering that their retirement pensions and social security are not enough, particularly because their medical bills are increasing as they get older. Fortunately, manufactured homeowners can now take advantage of bankruptcy laws to seek for mortgage and debt relief.
Manufactured homeowners are also discovering that they can be protected by Chapter 13 bankruptcy even if they are the owner of the land on which their mobile homes are currently placed. Whether the land is rented or owned no longer matters after the victory of the Colemans against Green Tree Lending in the US Bankruptcy Court of the Western District of Missouri. In simple terms, the decision allowed the plaintiffs to include the mortgage in their Chapter 13 bankruptcy filing.
Green Tree Lending had claimed that the 2005 amendments to the bankruptcy law that included manufactured homes prohibited the inclusion of the mortgage in the filing. However, the court ruled that inclusion of the mortgage in the bankruptcy filing would be possible unless the homeowner has a mortgage on the actual real property that also serves as the residence of the borrower.
Therefore, the above court decision indicates that liens can be removed from the assets of the debtor filing a Chapter 13 or Chapter 11 bankruptcy subject to a certain condition. The condition is that there should be insufficient equity in the asset after senior liens have been subtracted from the appraised market value of the property to secure either a part or the total unsecured debt, and the value of the property of the debtor is not enough to pay the lien. Therefore, the lien can only be considered to be secured when the asset that it has been attached to has value.