Debtor originally filed a Chapter 13 petition, but converted to Chapter 7. He listed a home on Schedule A and the mortgage note associated with it on Schedule D. The Debtor appeared to be underwater on the home by about $260,000.00.
The mortgage company moved to lift the stay. After the Court lifted the stay, the Trustee filed an Abandonment of Property in which the Trustee abandoned the home.
After the home was sold at a foreclosure sale, the first mortgage holder did not file an answer. Accordingly, its lien was extinguished under state law, and it was not entitled to be paid from the sale proceeds.
The sale proceeds were in excess of $80,000.00.