In the case of Bank of America, N.A. v. Caulkett (2014), the U.S Supreme Court ruled in favor of Bank of America, stating that a debtor in a Chapter 7 bankruptcy proceeding cannot void a junior mortgage lien under section 506(d) when debt owed on a senior lien exceeds the current value of the collateral property. The respondents, David Caulkett and Edelmiro Toledo-Cardona had filed for Chapter 7 bankruptcy and sought to cancel their second mortgages held by petitioner Bank Of America using Section 506(d) arguing that since their houses were worth less than what they owed on first mortgages, therefore making second ones worthless or "void". However, based on its previous decision in Dewsnup v. Timm (1992), which interpreted similar provisions within Section 506(d), the court unanimously decided against this argument as it would alter Congress's intended balance between creditors' rights and debtors' protections.

In the dissenting opinion for the case Bank of America, N.A. v. Caulkett, Justice Thomas disagreed with the majority's interpretation of Section 506(d) of the Bankruptcy Code. He argued that this section should not prevent a debtor from stripping off an underwater mortgage lien when filing for Chapter 7 bankruptcy. According to him, "secured claim" in Section 506(d) refers only to claims supported by a security interest in property, regardless of whether or not they are allowed under Section 502. Therefore, if a claim is secured and has been disallowed because it exceeds the value of collateral (as was true in Caulkett), then it can be stripped off under Section 506(d). This interpretation would provide more relief to debtors struggling with excessive debt burdens and aligns better with Congress' intent when drafting these provisions.