How to remove an abstract of judgment on my property after the judgment is discharged in chapter 7 bankruptcy court in Calif.

Asked over 1 year ago - Daly City, CA

I have a judgment lien for $375,000 on several properties I own. My chapter 7 (which include this judgment) is about to be discharged. How can I get this judgment off my property? I have two properties that I want to short sell and one that I want to keep but not if the judgment remains. Do I have an attorney file a motion in the bankruptcy court or in the state court? The judgment .was a result of a lawsuit at the state court. This judgment forced me to file bankruptcy. I thought once the debt got discharged, the notice of discharge would be sufficient to clear the liens. Please tell me what to do to clear the judgments against my properties. If it is something that a non-bankruptcy lawyer needs to do or can a bankruptcy attorney file something at the bankruptcy court.

Attorney answers (4)

  1. Michael Salanick

    Pro

    Contributor Level 14

    3

    Lawyers agree

    Answered . The judgment lien attaches to the real property (in rem) while your chapter 7 discharge will release you of personal liability (in personam) for the judgment.

    You may be able to avoid the judgment lien during your bankruptcy case only - if your case closes, however, you will need to reopen the bankruptcy ( and pay the court fee to reopen...) before filing the motion to avoid lien with all accompanying evidence.

    This is not a "simple" task for DIY or inexperienced, non-bankruptcy lawyers. In fact, the analysis may be complex and the specific rules for notice to creditors and service upon creditors require familiarity and working knowledge of the Federal Rules of Bankruptcy Procedure as well as any local rules and practice of the court where your case is filed.

    Bottom line: seek legal assistance ASAP to determine whether the judgment lien may be avoided with respect to your real property (residence, rentals, etc.) .

    Best of luck!

    Michael Salanick
    www.salanicklaw.com

    NOTE: we can be reached at www.salanicklaw.com (310) 590-4575. This answer is made available by the lawyer for... more
  2. Brian Crozier Whitaker

    Contributor Level 17

    2

    Lawyers agree

    Answered . Unfortunately, I must respectfully disagree with a couple of my colleagues. While it is true that a lien recorded within 90 days of filing may be an avoidable preference, it is only avoidable by the Trustee and is really irrelevant with respect to avoiding judgment liens that "impair exemptions". I put that in quotes because it is a misleading, poor choice of words and is often misunderstood even by BK attorneys.
    You will need to have your attorney file a motion to avoid that lien under 11 USC 522(f) but pay close attention to the formula therein and you may have to amend your schedules to apply SOME exemption to all of the properties (it does not have to be a homestead exemption).

  3. Malcolm Wallace Ruthven

    Contributor Level 15

    Answered . If the judgment liens were recorded within 90 days before your Chapter 7 was filed, they can probably be avoided (removed and turned into unsecured debt which your bankruptcy has presumably discharged) as a preference in bankruptcy court. If the judgment liens were recorded before that time, then I think you're out of luck.

    This reply does not constitute legal advice or establish an attorney-client relationship.
  4. Joseph Wrobel

    Pro

    Contributor Level 14

    1

    Lawyer agrees

    1

    Answered . Most likely, you can only remove the judgment against property in which you live. It is a motion to avoid a judgment lien that impairs the homestead exemption of the property. Homestead exemption is for property in which you reside. The mortgage balance(s) subtracted from the property must be exceed by the amount of the judgment lien in order to accomplish the removal of the lien, which is done through a motion filed with the court.

    Chapter 7 discharges your personal obligation to pay creditors. It does not by itself remove a judgment lien.

    You will need to talk to a local experience, bankruptcy attorney to help you.

    Please be advised that the advice to you herein does NOT establish an attorney client relationship and that our... more

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