Partner Jeffrey Fraser of Albertelli Law has authored “Broad Scope, or Slippery Slope? Justifications of Johnson” for the American Bankruptcy Institute (ABI) Journal (June 2025). The article examines the U.S. Supreme Court’s decision in Johnson v. Home State Bank—which allowed debtors to discharge personal liability in Chapter 7 yet treat the surviving mortgage lien in Chapter 13—and how lower courts have since expanded that holding beyond its original, narrow “chapter 20” context .
Fraser surveys the majority approach, highlighting decisions like Hutcherson and Stevenson that permit inclusion of non-privity claims in Chapter 13 plans, effectively erasing the need for a prior contractual relationship. He then contrasts the minority approach, citing Kizelnik, Parks, and Mullin, which confine Johnson to cases involving the same mortgagor and emphasizes privity of contract as a prerequisite to plan treatment.
In conclusion, Fraser argues that true “nonrecourse obligations” under §101(5) should be limited to a creditor’s surviving in rem rights against property, nothing more. Expanding the definition to include strangers’ interests erodes the distinction between personal liability and contractual privity, creating a “slippery slope” that departs from Johnson’s original scope