In the 1991 case of Aletha Dewsnup v. Louis L. Timm, et al., the U.S Supreme Court ruled on a matter concerning bankruptcy law and lien avoidance. The petitioner, Aletha Dewsnup, filed for Chapter 7 bankruptcy and sought to have liens against her property reduced or eliminated under Section 506(d) of the Bankruptcy Code. She argued that since her land's market value was less than what she owed in debt secured by liens on it, those liens should be considered unsecured and thus voided or "stripped down" to match its current value. However, both lower courts rejected this argument. The Supreme Court upheld these decisions in a unanimous ruling delivered by Justice Blackmun stating that Section 506(d) does not allow a debtor to strip down creditors' liens to reflect the diminished value of collateral real estate during bankruptcy proceedings; instead it allows only for invalidation of liens that are not allowed under applicable law or are not secured by any interest in property at all.

In the dissenting opinion for Dewsnup v. Timm, Justice Scalia argued that the majority's interpretation of Section 506(d) of the Bankruptcy Code was incorrect and inconsistent with its plain language. He contended that this section allows a debtor to void any lien on property if it secures a claim against him or her which is not an allowed secured claim, regardless of whether there are other liens on the same property securing claims which are allowed secured claims. The majority’s decision would effectively rewrite this provision by adding words not present in its text - "to the extent". This addition changes how much debtors can strip down undersecured mortgages to their current value rather than full loan amount owed. Furthermore, he criticized reliance on legislative history when statutory language is clear and warned about potential negative consequences from such approach including unpredictability in law application.