IN RE HALL

JACK SCHMETTERER, Bankruptcy Judge

On August 5, 2009, the Verified Complaint of Carla Hall, the Plaintiff in this adversary action and the debtor in a voluntary bankruptcy case before this Court, came before this Court for hearing upon proper notice. This Court, having reviewed and considered the Verified Complaint and Exhibits thereto and being otherwise fully advised in the premises, and having entered an Order of Default on February 2, 2010, now makes and enters the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

1. The Debtor owns an improved parcel of residential real estate located at 323 Waller; Chicago, Cook County, Illinois.

2. The Real Property is the Debtor's principal residence.

3. The Debtor is indebted to certain creditors holding mortgage liens against the real property as follows:

a. First Mortgage to: BAC Home Loans f/k/a Countrywide Home Loans f/k/a First Bank. The lien was established on October 15, 2004. The balance owing at the date complaint was filed was $116,375.00.

b. Second Mortgage to: Webster Bank. The lien was established July 13, 2006. The balance owing at the date complaint was filed was $24,202.00.

4. The first mortgage lien by BAC Homes Loans having a recording date of October 15, 2004 was given in connection with a note dated October 15, 2004. The original principal balance of this note was in the amount of $116,375.00. This note is now held by BAC Home Loans.

5. The second mortgage lien by Webster Bank having a recording dated in 2006 was given in connection with the note dated 2006, having an original principal balance in the amount of $24,202.00.

6. An appraisal was conducted by Byrnes, Houlihan Walsh. This appraisal was admitted as an exhibit in this case. The appraisal states that the fair market value of the Real Property is $50,000.00 to $60,000.00.

CONCLUSIONS OF LAW

1. Bankruptcy Rule 3012 allows this court to value the real estate interests in question.

2. Under 11 U.S.C. § 1322, a lien upon residential real estate used as a debtor's primary residence ordinarily cannot be modified. However, a wholly-unsecured lien can be avoided and cancelled, and an unsecured junior lien may therefore be eliminated through a Chapter 13 Plan. See First Bank Inc. v. Van Wie, 2003 WL 1563959 (S.D. Ind. 2003) and cases cited at slip opinion p. 3. Under § 1322, there cannot be any equity securing the lien at the time of valuation, and the lien must be wholly-unsecured to be avoided and cancelled. Such is the case here.

3. Under 11 U.S.C. § 506, a lien proven to be wholly unsecured can be cancelled subject to the limitation that in a Chapter 13 bankruptcy case, the lien cannot be cancelled through a Plan until successful completion of the Chapter 13 case.

4. In this case, the total amount due on the first mortgage is more than the value of the property, meaning that junior liens to the first mortgage are wholly unsecured and will be avoided and cancelled upon the successful confirmation and completion of debtor's Chapter 13 bankruptcy Plan which provides such remedy as part of that Plan.

Judgment will separately enter declaring that, upon successful completion of debtor's Chapter 13 Plan and entry of debtor's discharge, the liens of both Defendants will be rendered null and void. Jurisdiction will be retained to enter orders in aid of this judgment after debtor's discharge.