6.11.a Stripping Off Wholly Unsecured Lien

• Jurisdiction: United States

a. No step-up of tax lien after senior lien avoided

In a situation where judgment creditors' senior liens take up all the equity in the debtor's real property, and there is a junior tax lien, as well, but no equity for the tax lien to attach, what happens if the trustee avoids the judgment creditor liens as impairing the debtor's homestead exemption? Does the tax lien then simply move up to occupy the equity formerly encumbered by the now-avoided creditor liens?

11 U.S.C. § 551 appears to say, no. Under §...