Enewally

In this appeal, we consider whether a Chapter 13 bankruptcy plan may provide for dividing a loan into secured and unsecured claims, commonly referred to as “lien stripping,” with the debtor satisfying the secured claim beyond the life of the Chapter 13 plan. We conclude that this type of plan is not permitted under Chapter 13 of the Bankruptcy Code, and we affirm the judgment of the district court.

I

In 2000, Ikechukwu and Uzoamaka Ene-wally filed a joint voluntary petition for Chapter 13 bankruptcy and an accompanying Chapter 13 plan. In their schedules, the Enewallys listed a fee interest in three properties: their residence in Norwalk, California, and two rental properties in Long Beach, California. The property at issue in this case is located at 3380 Andy Street in Long Beach (“the Andy property”). The Enewallys’ bankruptcy schedules stated that the Andy property had a value of $210,000, encumbered by a $245,023 first deed of trust held by Washington Mutual Bank (“Bank”). Thus, according to the bankruptcy schedules, $35,023 of the Enewallys’ debt to the Bank was unsecured.

Under the debtors’ initial and First Amended Chapter 13 plans, the Bank was to receive regular…