STEPHEN MITCHELL, Bankruptcy Judge
A hearing was held in open court on September 30, 1997, on the plaintiffs' motion for entry of a default judgment voiding the defendant's third deed of trust against their residence. The plaintiffs were present by counsel. No appearance was made on behalf of the defendant. Because the relief the plaintiffs were seeking was apparently in conflict with a controlling Supreme Court opinion, the court took the matter under advisement. The plaintiffs have submitted a post-hearing brief, and the motion is ripe for determination.
However, it also does not appear that the motion and notice of hearing on entry of a default judgment was served on the defendant. It is true that F.R.Bankr.P. 7055, which incorporates Fed.R.Civ.P. 55, does not expressly require notice of an application for entry of default judgment unless the defendant "has appeared in the action," but the giving of such notice is nevertheless a salutary practice and one that is commonly followed by counsel appearing before this court.
Chong W. and Keum J. Yi ("the debtors") filed a joint voluntary petition under chapter 7 of the Bankruptcy Code in this court on July 8, 1997, and have not yet received a discharge. Their schedules reflect that they own, as tenants by the entirety, real property located at 1324 Cross Keys Court, Fairfax, Virginia, described as Lot 26, Section 6, Foxfield, Fairfax County, Virginia. The property is valued on their schedules at $183,165.00. It is shown on the schedules as being subject to a first-lien purchase-money deed of trust in favor of Mellon Mortgage, Inc. ("Mellon") in the amount of $172,572.28 and to a second-lien deed of trust in favor of First Union Home Equity Corp. ("First Union") securing a home equity loan in the amount of $19,920.61 The debtors also list on their schedules, as unsecured, a claim held by Citibank, FSB in the amount of $11,604.99, described as "Home equity line — wholly unsecured." The debtors did not claim any interest in the real estate as exempt, but the chapter 7 trustee, apparently concluding that there was no equity in the property for the benefit of the estate, filed a report of no distribution on August 18, 1997.
In the interim, the debtors filed on August 4, 1997, the complaint that is presently before the court. The complaint seeks, under § 506(a) and (d), Bankruptcy Code, to avoid a lien claimed by the defendant, Citibank of Maryland, N. A. ("Citibank"), arising from a third deed of trust against the real estate on the sole ground that there is no value in the property over and above the Mellon and First Union deeds of trust to support it. The return of service reflects that timely and proper service of the summons and complaint was made on Citibank by certified mail under F.R.Bankr.P. 7004(h). Notwithstanding such service, no answer or other pleading has been filed by Citibank, and the time for responding has expired.
Section 506, Bankruptcy Code, 11 U.S.C. § 506 ("Determination of secured status") provides in relevant part as follows:
(a) An allowed claim of a creditor secured by a lien on property in which the estate has an interest . . . is a secured claim to the extent of the value of such creditor's interest in the estate's interest in such property, . . . and is an unsecured claim to the extent that the value of such creditor's interest . . . is less than the amount of such allowed claim.
* * *
(d) To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void[.]
The response was due by September 4, 1997.
Since the defendant is in default, all well-pleaded facts in the complaint must be taken as established. Nevertheless, even in the face of a default, the court may examine the allegations of a complaint to determine whether the plaintiff is entitled to the relief requested. 10 Collier on Bankruptcy, ¶ 7055.02, p. 7055-5 (Lawrence P. King, ed., 15th ed. rev. 1997) ("Upon a default, the court is generally required to deem as true the well pleaded allegations of a complaint, but it is not required to agree that the pleaded facts constitute a valid cause of action. If it finds that no claim is stated, it may, in its discretion, refuse to enter the default judgment.") In this case, a controlling decision of the United States Supreme Court directly on point precludes the relief the debtors are seeking. In Dewsnup v. Timm, 502 U.S. 410, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992), the Court held that § 506(d), Bankruptcy Code, does not allow a chapter 7 debtor to "strip down" a creditor's lien to a judicially determined value of collateral.
The debtors argue that Dewsnup does not apply where the lien creditor is wholly unsecured, citing Howard v. Nat'l Westminster Bank (In re Howard), 184 B.R. 644 (Bankr. E.D. N.Y. 1995) and In re Geyer, 203 B.R. 726 (Bankr. S.D. Cal. 1996). Geyer, however, was a chapter 13 case, not a chapter 7 case. The ruling in Dewsnup was carefully limited to the chapter 7 context. Dewsnup at 418-419 (" Apart from reorganization proceedings . . . no provision of the pre-Code statute permitted involuntary reduction of the amount of a creditor's lien for any reason other than payment on the debt.") (emphasis added). Put simply, nothing in Dewsnup prohibits lien stripping in the reorganization (i.e., chapter 11 and chapter 13) contexts. Howard, unlike Geyer, is a chapter 7 case. The bankruptcy court in that case read Dewsnup narrowly not to apply when a lien creditor's claim is wholly unsecured (in the sense that there was no equity in the property to which the lien could attach) as opposed to merely being undersecured. The Howard court also distinguished Dewsnup on the basis that the lien in Howard was a judgment lien, while Dewsnup involved a mortgage lien. The court reasoned:
[T]his is a non-consensual lien.
parties never bargained to secure the debt with a lien on the Residence. As a result, one of the major underpinnings of Dewsnup does not apply. Unlike a mortgagee, a judgment creditor takes its chances when attempting to secure the judgment.
Howard at 647 (emphasis added). In the present case, by contrast, the lien the debtors are seeking to avoid is a consensual lien. Thus,
Howard, even if this court were disposed to accept its reasoning,
would not apply.
No other court appears to have followed or cited Howard.
Because the court concludes that the debtors are seeking to accomplish precisely what the Supreme Court held in Dewsnup could not be done in a chapter 7 case, entry of a default judgment avoiding Citibank's lien is not appropriate. Additionally, since — even taking all the facts alleged in the complaint as true — the debtors are not entitled to the relief they seek, the court will, on its own motion, dismiss the complaint for failure to state a claim upon which relief can be granted.
A separate order will be entered consistent with this opinion.