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Avoiding A Judgment Lien in Bankruptcy

Once a creditor obtains a judgment against you in court, there are several options available to the creditor to collect on the awarded judgment. One of the often used methods is to record the abstract of judgment with the county recorder. The creditor in many states can take the awarded judgment and record a lien against real estate you own. In California, the judgment can become a lien against any real estate located in the county where the judgment was recorded. In many states the creditor can also place a lien against your personal property by filing the notice of judgment lien with the Secretary of State. If a judgment lien has been recorded against your real or personal property,  bankruptcy can help avoid the lien.

Under section 522(f) of the bankruptcy code a judgment lien can be removed/avoided from your real or personal property if it meets with the following requirements:

  1. Judicial Lien- the lien must have been obtained as a result of a judgment or other legal process.  The judgment lien cannot have resulted from you consensually agreeing to place a lien on your property.
  2. Non-possessory and Non-purchase Lien - In order to qualify the creditor cannot have actual physical possession of the asset themselves but simply a legal claim against it. The lien cannot have resulted from you consensually placing a lien on the property in exchange for the creditor extending you creditor to purchase the asset or refinance.
  3. Property-The lien can be avoided on items such as household goods-clothing, furniture, appliances, radio, television, medical equipment, kitchenware or real estate.
  4. Entitlement to Exemption is Impaired-The judicial lien must impair your right to claim a bankruptcy exemption in order to avoid the lien. For example in California there is a $23, 250 wildcard exemption that allows you to protect any items totaling up to that amount. If a judicial lien  for $5,000 was placed on your paid in full vehicle worth $10,000 it would impair your right to claim the full $10,000 as exempt. The judicial lien would damage your ability to claim the full value of the vehicle as a protected asset using the wildcard protection.

In bankruptcy a motion to avoid a judicial lien can be filed in a Chapter 7 and Chapter 13 bankruptcy case. If the court finds that the judgment lien can be avoided then an order will be issued by the court.  Once the lien is avoided in bankruptcy it is considered invalid.  Contact a local bankruptcy attorney if you have received a notice from the secretary of state or the county recorder indicating that a judgment lien has been recorded against your property.

Comments

Tammy the Judgment lien will become void after your bankruptcy discharge and will not attach to any future property. Any future property that you acquire after your bankruptcy discharge will not be subject to the judgment lien and the judgment lien will not be attached to it.
When you filed your bankruptcy case you needed to file a motion to avoid the judgment lien from the home. The fact that the debt was discharged in bankruptcy does not eliminate the lien that was placed on the home from the creditor. During your bankruptcy case, you needed to file a motion to avoid the judgment lien, in order to remove the lien. Without doing this the lien remains valid even after bankruptcy.
A lien was placed on my property in February 2011; the company came after my wages. In December 2011, I filed chapter 7 bankruptcy and it was discharged on January 2012 and included company on the BK however, when I short sale the house the company did not removed the lien from the property and I could not sell the house. Can I sue the company for obstructing the short sale, knowing that the bankruptcy discharged the debt?
Steve, generally the time frame you are looking at is approximately 1.5 months to 2 months to get the process completed.
How quickly can a BK be reopened and a motion to avoid lien be filed and approved? The debts wee discharged in the original BK last year, but the attorney did not file motions to avoid. We are trying to close a time sensitive short sale and the seller's judgements were not discovered by title until the last day! The bank has already funded the loan.
I have a judgment lien filed against me in the county clerk's office in my county. I am filing a Chapter 7 bankruptcy. I do not currently have any real estate. However, if after my bankruptcy is discharged and I purchase real estaet in the future, doesn't thet lien attach to any future property that I have in my name? So, if I not have real estate now then how can my exemption be impaired to file a Motion to Avoid the Lien in the bankruptcy? How do I get rid of the lien so it does not affect me in the future?
Jasmine, a judgment in California can last in definitely as the creditor can renew the judgment every 10 years and record the abstract of judgment on the property again. You can consider talking to the creditor on a settlement that would satisfy the judgment and get the lien removed or you can consider the option of bankruptcy. If it is a judgment lien from a creditor then it may qualify to be removed as part of a bankruptcy case.
My husband had a business with other partnership and due to his business there was a abstract lien placed on our property in alameda county. this is own by me ,my husband and his cousin 50/50. My question is the vlaidity of the judgment,as they extended the lien afer 10 years how long can they keep it. Also I am also responsible for this lien even though I was nto a part of the business and it is his name only.
We never got any notices of these lien what so ever.What are my option
Thanks
Ella, If the debt is not secured then it is potentially dischargeable unless you have a basis to dispute the discharge of the debt on the basis of fraud, etc. If the loans are secured against his homes then whether these liens are avoidable will depend on when they were placed on the property and when your brother files for bankruptcy. A trustee may seek to remove the liens on the homes if he determines that it is an insider preference if they were obtained within 1 year of your brother filing for bankruptcy. If they are voluntary liens placed on your home then they are not subject to removal on the basis of a 522 motion.
Mel, if the attorney was aware that there was a judgment lien on your home, then a motion to avoid a the judgment lien should have been filed in your Chapter 7 bankruptcy case. You can still remove the lien if it qualifies by reopening your case and filing the motion to avoid the judgment lien. The only issues with this is that it generally cost more money and time then it should have.
The reason that you have to use 522(f) is that the judgement lien is a non consensual lien that was placed on the property as a result of a judgment. The bankruptcy code required that you file a 522 motion to avoid this type of lien. The lien granted under this section is not based on the property having no equity but on the factors detailed in the article. I would suggest that you withdraw the motion and file a 522(f) motion.
In order to avoid a judgment lien under 522(f) in bankruptcy, it would require that the lien be on: (i) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor;
(ii) implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor; or
(iii) professionally prescribed health aids for the debtor or a dependent of the debtor.

From what you are describing the lien does not appear to be placed on any of the above categories.
The court may be able to set aside the judgment lien on another basis such as a preference. This will depend on when the bankruptcy case is filed and whether it qualifies as a preference at the time of filing. A judgment lien perfected within 90 days of filing may be avoided and be treated as unsecured if it meets the requirements of section 547. I would consult with a local bankruptcy attorney immediately to discuss your options.
I landed to my brother over $100,000 for his LLC business and another 50,000 for his other due payments. I asked him to secure these loans by a lien on one of his paid off homes . My question is if this kind of voluntary lien can be discharged in a bk court?
I am in NJ and lien is in NJ too.
I filed for bankruptcy and it was discharged in 5/11. I tried to refinance my house and was informed that I had a lien on my house by one of the discharged creditors. The mortgage company said that I needed to file a motion to avoid the lien. The attorney had the original letter from the creditor dated 8/10 that a lien had been placed on my house but they did not file the motion to avoid. Should they have informed me that I needed to file this motion? Can I still file this motion after the discharged bankruptcy? And can I have a different attorney handle this?
Hi Norma,

I am a bankruptcy paralegal facing foreclosure. I am really familiar with bankruptcy so I decided to filed my case pro-se when my property was being foreclosed on two months ago. Something came up with my case and I am to embarrased to ask the attorney I work for about my situation, so I hope you can help. I have a house with three liens, my first mortgage lien is for the amount of $238,400.00, the second mortgage lien is for $65,000.00 and the third is a judment lien for a credit card for the amount of $8,000.00. The fair market value for my property is $142,000.00. I filed two motion to avoid under 506(a) for both junior liens. The one for $65,000.00 was granted. The one for $8,000.00 was continued the judge stated the following: "The Court has reviewed this motion and it appears that the debtor is attempting to use the Lam/Zimmer process to eliminate a judgment lien. Normally, section 522(f) is utilized to eliminate a judgment lien. It is procedurally and substantively superior for several reasons."
My case was continue to resolve this issue. I feel that I have to withdraw my Motion under 506(a) and file the motion under 522(f) however, my property has no equity, I don't understand why I will use 522(f) when my property has no equity. Please help!!!!
I was in a lawsuit and I won $100,000. Before I could collect the money, a creditor placed a $500,000 judgment lien on the proceeds. I also have about $500,000 in back taxes. If I file for chapter 7, can the lien be avoided. I'd rather the money go to pay the taxes.

The defendant hasn't paid the money yet.
This really depends on a number of issues. A judgment lien does not vanish simply because its not on the credit report or the account is shown as charged off. The judgment lien will remain alive in your case, until the state law says it expires. In addition your state law may allow the renewal of the judgment lien if it has not been extinguished. The problem can become that with the existence of a judgment lien, any real property you acquire may be subject to attachment from the lien. You need to consult a local attorney to determine how long is the lien valid for to better assess the risk and options.
I can only answer this as to California law. If an abstract of judgment is recorded prior to the purchase of real property, then it can attach to property purchased after the recording. The lien has to be recorded in the county in which the property is being purchased for it to attach to the property once you purchase it. The abstract of judgment will affect any current property you own in the county it was recorded in, as well as any after acquired property.
A voluntary lien that you placed on your vehicle is not subject to removal in a Chapter 7 bankruptcy. The consensual lien is not a judgment lien that can be avoided through a 522 motion.
I have filed BK Chapter 7. Deemed No assets. Without explaining why, my only asset is a car Valued at $2800.00 and have a lien with a finance company owing 2,099.00 dollars. I filed out the Statement of Intention stating 11 U.S.C 522 (f) reason," I need my car for work , but I needed the loan to move in order to take care of my sick sister. Will the court consider other reasoning and remove a lien in bankruptcy?
As mentioned before they should not have a right to continue to garnish your funds after your discharge was entered.
If you have obtained a discharge then there is an injunction that prohibits the creditor from continuing to collect on the garnishment. If he is garnishing your wages after the discharge then he is violating the discharge injunction and could be subject to sanctions from the court. The funds that were garnished prior to your bankruptcy case being filed may be recoverable as a preference. You need to file an adversary proceeding for the preferential transfer, if the amount garnished was more than $600 within 90 day before filing for bankruptcy and you were insolvent at the time. I do not believe that garnished funds after your bankruptcy case was filed are recoverable if there was no automatic stay. The funds that were garnished after the discharge order was entered are recoverable since it violates the discharge injunction. I would first try to contact the creditor to see if they will voluntarily return the funds.
Generally you have to file a separate motion as part of your bankruptcy. You need to file a motion to avoid a judgment lien. If you do not file the motion and have it approved then the lien will remain on your property even after the bankruptcy discharge. Once you have an order granting the motion to avoid the judgment lien, you need to record it in the county in which the lien was recorded. Before you do this please check with a local attorney as their may be states where the state law provides that upon a discharge the lien is extinguished.
Hi, I'm in the process of buying a home we will be closing in about 5 days. However today I received a Summons of notice of an Abstract judgment to a property that I still do not own! What do you suggest I do? What can I do to prevent this lien to a property I still don't own.
First of all I find this website and your time is a heaven sent. Need opinion and what would Norma actually do? We had scheduled with our realtor to sign title (loan already approved). On way there realtor called and said title company states that there is a judgement filed July 2006 for $30,000 from am express! We cannot move forward until this is handled!
Here's the detailed; March 2006 AM Express called demanding the $30,000 which an authorized user charged up. July 2006 judgment was recorded and two months of garnishment followed. Sept 2006 Filed bk13 (Am Express no longer bothered with us.) April 2008 lost income and Bk dismissed. No calls from any collectors at all. 6 years later Oct 2011 credit bureaus show notes for AM Express "charged off loss/ account closed by credit grantor". Nov. 2011 credit bureaus no longer shows AM Express on report (all three). Mortgage co. shows nothing as well therefore approving the loan. We don't have the funds to pay judgment and are afraid to recontact Am
Express to negotiate (tried to years back but they demanded full). We have no problem getting credit for anything else. We are afraid to call only to bring up what has been dormant all these years. Would you just move on and hopefully have this fall off eventually or contact them, thinking they wont do anything like the first time and demand total amount and on top off that re contact the credit bureaus to report this again! Than you for any input.
I have a lien recorded against me and now I am filing for bankruptcy regarding that debt. I don't see any mention of removal of judgements or removal of liens in my bankruptcy paperwork. Is there an additional form I need to file? Do I need to record my bankruptcy discharge in my county to remove the lien?
Its not clear from your question what you are trying to achieve, but if you are intending to stop the foreclosure then you want to make sure that you file before the foreclosure date. As far as 522 motions are concerned they involve removing a judicial lien that exists at the time of the of the filing of the bankruptcy whether it be on real property or personal property.
i have a house in foreclosure lender trying to motion for summary judgement do i wait till they do that to file bk or should i do it prior to. also the 522 f shouldnt there be a lien on property first .
Also, I forgot to mention that the judgment creditor is not a government entity or spousal/child support. The judgment creditor is consumer debt / collections agency, so I don't have to pay it as a result of my discharge, right? Why can they continue to garnish my wages even after I have received a discharge?
I filed several bks within one year, which were all dismissed for deficiencies. Finally, I got my act together and I filed a bk in 11/2011 but it didn't stop the wage garnishment by a judgment creditor, i.e. no automatic stay because of the several previous filings. I listed judgment creditor and lawsuit in F and SOFA. I also listed 90 Days Wage Garnishment for the entire judgment amount in B and C. Nevertheless, judgment creditor continued to garnishin my wages during the entire bankruptcy and continues to garnish my wages AFTER I have already received a discharge. What can I do to stop this? I have done some research, and it appears that I need to file a motion to avoid judicial lien and request return of funds. Central District has a form, but it seems that it can only be used for personal property (i.e. household goods and items) - not for wage garnishment. Is this the right form? The right approach? Please help!
Here are some options you can try:

1) First contact the trustee in the case to determine if they are willing to have a letter directed to the sheriffs office to release the funds. Some trustee's are willing to do this and if the sheriff abides then the funds will be returned to you. Most of the time they are unwilling to do this if the funds are exempt since they have no interest and will not get anything in for the creditors.
2) Contact the creditor and ask for voluntary return of the funds. Some creditors will voluntarily return the funds because they know that if they have levied over $600 within 90 days of filing, then a preference action may be brought against them. This may result in additional costs to them.
3) If the funds are with sheriff's then you would file a motion to avoid the lien and have the funds returned to you.
4) If the funds are in the hands of the creditor then you should consider filing an preference action if the amount obtained was $600 or more over the 90 days prior to the filing of your bankruptcy case.
It is very uncommon for any credit card company to seek to collect personal possessions for credit card debt. I have never seen it yet. Generally used household goods would be worthless to a credit card company, which most of the time they can get almost nothing for. If you have basic household stuff, that is not highly valuable I doubt any credit card company would seek to collect these items.

In addition, there are state exemptions also that may prohibit a credit from seizing household items to collect on a judgment. Depending on your state, your households goods and personal items may be exempt from enforcement.
I believe that you have a good argument for seeking to remove this judgment from your credit report. In my view the continued reporting of this judgment is in violation of the permanent injunction that prohibits creditors from seeking any collection efforts against you after your bankruptcy case is discharged. They will potentially argue that this is not against you but against the property itself. The fact that they are reporting a judgment on your credit report to me is a collection effort against you and not just the property. I would contact a local attorney in your area to discuss possibly looking at this situation, even they do not voluntarily remove the judgment on their own.

Any foreclosure and judgment should be "in rem" which is against the land and not you. The judgment and foreclosure should not be against you personally unless you incurred some liability in the judgment post-bankruptcy that you are responsible for such as attorneys fees or HOA fees. The judgment is generally recorded in public records but unfortunately mortgage companies feel that they have a right to also report it on your credit report which in my view is treating it as a personal liability against you.
A creditor received a judgment and then attempted to levy on a bank account. The BK case was filed after the levy but before the monies were distributed. The money in the bank account has been listed as exempt. The sherriff is saying that unless we get a court order to release the money, they will hold the money until the stay is terminated and then distribute it to the creditor. What kind of motion is needed to have the court order the money to be released to the debtor? Is it a motion to avoid judicial lien? Thanks so much
First I would have to determine whether it was a voluntary lien you gave to the company for the business loan or whether it was a lien placed on the vehicle as a result of a judgment that the creditor obtained. If it was a voluntary lien that you gave to the bank then you cannot avoid the lien through a 522 motion. The lien would still exist at this time on the vehicle if you were not able to avoid the lien in the bankruptcy. The discharge would not have eliminated the lien on the vehicle.
My chapter 7 bankruptcy was discharged in Sept. 2012. I had a business loan that was discharged in that bankruptcy. I have a car that was paid for but had a lien against it securing the business loan. Does the bankruptcy discharge the lien or can the bank keep my car?
My friend owns no real estate or property. When he got sick several years ago he used his credit card to pay living expenses while he waited for his Social Security Disability to be approved. Now, the credit card company has placed a lien on his savings account, but not on his checking because his SSDI is deposited into the checking and it's his only income. We understand that they can't take his disability payments. But, he is worried that they can take his furniture, clothes and other personal items. Can a credit card company (VISA or Mastercard) take his personal
stuff? He's really worried and can't afford to file bankruptcy. Thanks!
I need help. We filed bankruptcy in Dec 2009. It was discharged Apr 2010. We included our mortgage in br. The mortgage company filed for foreclosure in Dec 2010. In Oct 2011 the bank set aside the sale because they didn't secure the home or additional lot in the mortgage and put the house back into our name. In Jan 2012 they reopened the case for another foreclosure. We are waiting on a court date. Yesterday we went to apply for a loan and had a problem because there is now a judgement on our credit for the mortgage. It was not on there in April 2011 but the date they have on credit report is 12/10. Can they take a judgement if it was included in bankruptcy? Can I get that removed off my credit? This has been a huge nightmare for 2 yrs now.
George this is really dependent on state law and how liens are treated. You would have to check with an attorney in your state. In California the abstract of judgment attaches to real property. If you did not own any real property then when you file for bankruptcy there should be no lien to avoid. No lien should exist for any property that is acquired after the bankruptcy since the judgment was discharged as part of the bankruptcy. If the creditor sought to enforce the lien after bankruptcy then you could seek sanctions against the creditor for violating the discharge.
I would advise you to sit down with a local bankruptcy attorney to determine whether your parents need to file for bankruptcy and whether the liens could be removed as part of the bankruptcy process. I would not be able to tell you whether they are subject to removal in a bankruptcy unless I review the facts of your case and the equity existing on your property. If the judgment liens can be removed in the bankruptcy case then you may not have to pay them back.
Hi,

If either an HOA lien for delinquent dues or a judgment lien is filed against a property and you "me" are making good faith payments toward paying off the debt, does that change the amount of the lien?

Does the creditor have to re-file a new lien with an amended amount? Specifically, if you go to sell the property.

Thank you,
Hi,

I have a abstract judgment recorded against me, but i own no properties. Do I still have to file a judicial lien strip?

Thank you for your response.

George
Hi, I called the law offices for this abstract of judgement and they want to settle for a lump sum of $1700, I do not have that money. I went to the superior court to try to dispute, but did not get an answer. Please help. What else can I do.??

Rosie
Contact the law office and try to see if they are willing to work out something with you in exchange for removing the lien on the property.
Thank you for your time and advice.... I owe the creditor $1900, I think I rather try to contact them and try to settle than to hire an attorney that's going to cost me double. I'm just not sure if I need to contact the law offices that is representing the creditor or the creditor itself..... ?
Roise
I am sorry to hear you were not aware of any lawsuit. If they have recorded an abstract of judgment and you want to dispute the judgment and its validity then you may want to talk to a local attorney that practices civil litigation. They may be able to advice you on whether you can vacate the judgment. Another option is to look into bankruptcy filing to remove the abstract of judgment that was recorded.
Whether this abstract of judgment that was recorded can be removed will depend on what property you own and what is the equity in that property, and what you can claim as exempt. Although a lien can be removed even if is a result of fraud, there is a potential that the actual debt will not be discharged if they establish that the debt was in fact a result of fraud.
I received a abstract of judgement in Jan n it states that they may have a lien against my property.. I never received a summons letter and throughout the time they said they served me I was not at the address they had in their records; plus i as enrolled in a debt management program at that time. I would've done something before it got to this point. Please help!! Thank u and god bless
Can a bankruptcy attorney removed a Contractural Fraud (Los Angeles , CA. General Jurisdiction) Abstract Judgement of $350,000.00 with a Charter 7 or 13. If I file Bankruptcy how long will it take to get my Credit rating back to normal?
Hi, I have what I think a complicated question, hopefully you can advise me. About 10 years ago my dad had stroke and became dissabled. My mom was not going to be able to afford the payments on their home. My husband and I were living with my parents and paying rent. We made an agreement with my parents that My husband and I would take over the loan balance of the house and my parents would remain on title as well as my husband and I because of the equity they had acumulated on their home. I refinanced the house under My name and My husbands but kept my parents on title because of their equity. The house is owned in 4 equal shares. My problem is that my parents had 2 unsecured credit cards that they were not able to pay and they filed judgements and had abstract of judgement liens filed on the property after the refinance. I had asked my dad to file bk before and he was stubborn and wouldnt do it. He thought the credit card debt would be charged off and eventually drop off. Now I am at a point where I would like to refinance the house so that I could get a lower interest rate but when they do a title search the liens against my mom and dads name show up and I was told I would have to pay them in order to refinance. I do not feel I should have to pay them as they were not my debt. The loan is completely under my name and I have been making the payments for at least 10 years. Is there any way to avoid paying the liens? having them removed? I hope I didn't make this too hard to understand.
The secured debt limit in a Chapter 13 bankruptcy stands at $1,081,400. There are several options sometimes when you are over the secured debt limit such as executing a deed a deed in lieu of foreclosure if the house is underwater. If the house has equity then of course the courts will examine the sale and transaction to determine if there was an fraudulent conveyance. What will be counted toward the secured debt amount also depend on where you are filing. For example some areas do not treat a second mortgage that is completely unsecured (meaning that there is no equity that the second mortgage attaches to) as a secured debt. It is treated instead as a unsecured debt. Another option may be to consider filing for Chapter 11 bankruptcy which does not have these debt limits.
I understand that the limit for bankruptcy is $1,010,650 in unsecured debt for Chapter 13. Suppose that you have a higher amount in secured debts - ie, you own several rental properties and have several properties, all with mortgages. What happens then? Would you need to sell one property in order to have a lower debt amount? I have heard that any sale before filing for Bankruptcy would be scrutinized thoroughly. However, if it was a legitimate sale (ie, a commercial sale at a fair price), could the person still file for bankruptcy at a later date? (California)
This really gets into issues of options in a civil case in state court (I presume) for a creditor who is suing you and this really would be outside of the scope of law that I practice. Of course you can always settle a claim that someone is bringing if the other party wishes to settle, but whether you should depends on really a number of factors and whether it is in your best interest to fight the lawsuit or settle the debt. The first step is really to talk to an attorney who can review the lawsuit and give you options.
Re-phrasing my earlier question to a more general question: Suppose someone is suing you for $1 Million. The lawsuit is over an issue that is definitely discharge-able in bankruptcy filing (ie, no fraud, malicious intent, etc.). However, you own real estate rental properties, some of which have equity. You don't want your life to be a living hell for the next few years while a collection agent places liens and forecloses your properties, since you depend on the income from those properties. But you are not behind on any mortgages either, at this time. So, what alternatives are there to - at the very least - negotiate a more reasonable settlement with the plaintiff? In a previous answer, you suggested to consult with a bankruptcy attorney. But suppose a bankruptcy attorney does not perceive you as qualifying client? Is there any other type of protections available? In other words, if a plaintiff is just so vindictive that they want to destroy you financially, what recourse do you have? (California resident)
I would recommend first sitting down with a bankruptcy attorney to assess your friend's current assets and situation and thereby determine if considering bankruptcy is even an option. It is difficult to provide you any real concrete information on your situation without looking at his assets and also asking further questions about the accident. Most attorney's will provide you with a free initial consultation to assess your situation. If the person owns assets with a lot of equity then filing for bankruptcy may affect whether he is allowed to retain them as part of a bankruptcy.
The clerk does not appear to know what can remove a lien off the property. If you have a motion to avoid a judicial lien approved by the bankruptcy court for that particular lien then they should record the certified copy of the order. The recording invalidates the lien that was recorded on the property. I do not believe the clerk has a valid basis for denying you the ability to record a certified copy of an order that invalidates and lifts the judicial lien from your property. I would ask to speak to a supervisor to discuss the situation with them and verify what is the basis for denying you the ability to record a bankruptcy order. The bankruptcy order does work to lift the lien off your property.
My friend is being sued for a serious traffic accident. (Which we think is not his fault, but there is "comparative negligence" in California). The plaintiff is asking for $1 million, which greatly exceeds his insurance. My friend owns rental properties with varying degrees of equity, but basically a $1 million loss - or even $500k - would render his entire business non-sustainable as he is presently losing money in the present rental market as it is. Can bankruptcy help him? And if so, when should he file? Right now, or after a judgement occurs? I should point out that he is not behind in any mortgage payments right now; rather it is the possible judgement that would bankrupt him. What would happen to property that is 100% owned? What about the current mortgaged properties? Please advise. This is in California. Thank you!
I filed Ch. 7 in 2011. Two law corporations representing creditors had filed liens against my real property. My attorney entered a motion to avoid the lien and the judge granted the order. I got a certified copy of the order and took it to the county recorder to file it. The clerk said it would not remove my lien and wouldn't file it. She said that only helped me during the bankruptcy but the order did not negate or remove the lien. How do I get the liens removed from my house?
I need further details of your situation to better understand what is going on and what you goal is in filing for bankruptcy. I would suggest that you call me at 951-241-8070 to discuss your situation.
Followup to Larry on Wed, 7th Dec: The house is worth $500,000. The mortgage balance is $110,000. The judgment lien, based on fraud, was recorded in 1994. The lien, principal + interest, is now at $1,000,000 +. I am 72 and wish to sell the house; it is my only asset. How much might I realize in a bankruptcy sale? Is the exemption set at $75,000, the amount in effect when the lien was recorded, or would the current exemption amount of $175,000 apply? What other bankruptcy expenses might there be?
The judgment liens attach to the property, therefore any sale of the property would have to clear off the liens, or they would cloud the title. I would suggest that the debtor reopen the bankruptcy case and file motions to avoid the judgment liens. If these liens are not removed they will present problems potentially for obtaining financing or finding a buyer who is willing to buy a home that carries liens.
I have a question if you could possibly help. I am a real estate agent and I am in the process of a shortsale. The property has various judgments against the property. The judgments were filed before my client filed bankruptcy. Now that her bk is discharged should the liens be automatically removed from title, or should the 522(f) paperwork have been filed seperate. Or is it possible to re-open the case and have the necessary paperwork filed to remove the liens.
The fact that you file for bankruptcy first does not mean your home will be sold as part of the bankruptcy. This will depend on how much equity is in your home and whether the available state exemptions can protect the equity in your home. If there is a judgment lien on your home for fraud it can be removed as part of your bankruptcy if it qualifies under the above stated requirements. Keep in mind that debts for fraud are non-dischargeable. If the judgment debtor establishes that the debt resulted from an act of fraud then the debt will not be discharged in bankruptcy, even though the lien was removed.
What if a judgment is based on a jury verdict of fraud, and such judgment has been secured against the debtor's personal home. Can the debtor sell his house in bankruptcy to avoid payment on a judicial lien based on fraud?
My understanding is that the CCP 703 exemptions including the wildcard exemption are applicable only in bankruptcy. You can utilize some of the CCP 704 exemptions outside of bankruptcy to file a claim of exemptions in your case. There is no time limit for removing a non-consensual lien in bankruptcy. If it meets the requirements to avoid the lien than it can be removed regardless of the time period that has elapsed since the lien was placed on your property.
Is the $23,250 wildcard exemption applicable as to a judgment or only if you file bankruptcy only, or both?

In the instance in which a judgment creditor plans on executing a writ to levy an asset, I understand the judgment debtor shall receive a notice of levy from the levying officer [CCP 700.010] at which point the judgment debtor can then claim exemption from the levy [CCP 703.520], correct?

In terms of removing a non-consensual judicial judgment lien once BK is filed, I was advised that the lien itself cannot be removed after a certain time period, only the debt. This sound contradictory to what you have outlined above.

Please advise.
Do you know specifically when the lien was placed on the property? If the lien was placed on the property after the filing of your bankruptcy case then this was a violation of the automatic stay. While your bankruptcy case was pending the automatic stay would have prevented them from creating or perfecting a lien on your home. The lien may be void or voidable depending on where you live and the case law in your area on this subject.
I just found out that eventhough I filed bankruptcy in 3/2011 the sanitation district in my town put a lien on my home at the end of 3/2011. I received no notification of this and now they are threatening me to put a 2nd lien on the house because I never paid the administrative costs associated with the 1st lien. My bill with them is up to date. Is it legal for the lien to have been placed while I was under bankruptcy protection?
Typically any real estate taxes that are owed on a property that is foreclosed upon are paid either by the bank or the purchaser of the home. Generally real estate taxes are treated as secured debt against the property. I would check with the mortgage company that completed the foreclosure to determine if any real estate taxes were paid by them as part of the foreclosure process or paid by the new purchaser. You need to investigate how your state treats real estate taxes in a foreclosure process. In California, the buyer at the foreclosure sale must pay the real estate taxes to clear title.
I filed chapter 7 BK in 2005 and was discharged. The Mortgage company that financed the home I was living in did not reaffirm the home as we had reqeusted. Unfortunetely we did not find this out until March of 2010 when we were trying to get information on our mortgage to purchase a new home. Our BK attorney told us to walk away from it, so we did. Now we have been trying to purchase the home we have been living in for the past 18 months, with no luck. Our local county has place a judgement against us for not paying property taxes on a home we do not own. This in return has placed another hurdle in our mortgage process. any advice on what or if there is anything we can do.
I am furious that the mortgage company continued to take $16,000.00 worth of payments without informing us of what had happened. We also spent several hundreds of dollars doing remodeling to the house.

I feel that because of this I will not be able to purchase a new home for many years to come. I also feel like a fool for giving those people all that money. It makes me sick to my stomch to know I poored that much money down the drain for this to happen.
I have tried to speak with a mortgage rep several times from his company and they could never seem to give me any information due to the BK, but expected me to continue to give them free money.
After walking away and the mortgage company started the foreclosure papers that is when they decided to send out reaffirmation papers. Also my lawyer informed me they sent papers for reaffirmation, out several times before my BK court date but the mortgage company never responded. And they never recorded a mortgage to the credit bureaur in those five years.
Please tell me there is something I can do about all this.
The creditor is in violation of the automatic stay if he filed the abstract of judgment after the filing of your bankruptcy case. Contact the attorney and ask them to voluntarily remove the recorded abstract. If they fail to remove the recorded abstract then you may want to consider reopening your case and seeking sanctions against the creditor.
I am in this situation now, just found out that the discharged creditor filled this abstract judgment against my homes with negative equity. I received my discharged in 8/10 that also protects my spouse under the community property discharged. The creditor recorded this judgment after my discharged. I did not received any notice from the creditor or the county. Please advise. Thank you.

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