Although not every federal circuit court has addressed this issue, the majority of those that have ultimately determined that the reasoning in Dewsnup extends to the strip off issue, prohibiting debtors from using section 506(d) to eliminate wholly unsecured junior liens. Courts in the Eleventh Circuit, however, have continually relied on a pre-Dewsnup decision, In re Folendore, that permitted strip off in chapter 7. The Eleventh Circuit reaffirmed this decision post-Dewsnup in In re McNeal. In essence, courts in the Eleventh Circuit permit chapter 7 debtors to strip off wholly unsecured junior liens because they interpret Dewsnup as not being clearly on point, leaving In re Folendore as controlling precedent.
While the Second Circuit has not yet spoken on this issue, the United States District Court for Eastern District of New York has, and in Wachovia Mortgage v. Smoot held that section 506(d) of the Bankruptcy Code does not permit chapter 7 debtors to strip off wholly unsecured liens, relying on the reasoning of the Supreme Court's decision in Dewsnup.
The lasting effect of the Supreme Court's denial to hear Slinkfield is that this issue will remain open to interpretation until either Congress or the Court offers a definitive answer.