I filed a Ch 7 Bk in 2010. My house was worth 172K and had a 1st of 187K. No equity. Ch 7 went through without problems. I recently learned I have two judgment liens on my house created by abstract of judgments both filed prior to the bankruptcy. I've been told I need to bring a motion to avoid these liens. I've been told I must reopen my bankruptcy to do that. My house now has equity. The previous attorney did not exempt my house because it had no equity. Can I reopen my case, exempt one dollar of the house under schedule C, and file motions to remove these links without the trustee or creditors going after the 50,000 inequity that I now have?
There are a few cases here in California which hold that post-petition increases in equity - while the bankruptcy case is open - are property of the bankruptcy estate. Here is one such case: http://caselaw.findlaw.com/us-9th-circuit/1538192.html Your increase in equity presumably occurred after your bankruptcy case was closed, but there is still going to be this equity if you open your bankruptcy up again and by opening the bankruptcy case again you are reopening the bankruptcy estate. Will this be a problem? Well not if you have the homestead exemption available to exempt it, and not if the Trustee doesn't take an interest in it. But it is a tricky issue and I couldn't tell you for certain how this will turn out. Get yourself a good attorney to help you with this - it could be that you really don't want to be opening your bankruptcy case with this increased equity. You should also get an appraisal done - it could be there is less equity than you think.
The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.
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Wow...I thought I saw it all before..First, I have heard before "the attorney forgot to do this" but many attorneys do not know about a lien as the debtor did NOT list the lawsuits and thus not advised the debtor. I am NOT saying that was the issue in your case but just saying in general that sometimes happen. I do NOT know what exemptions are available to you in your case in California..You should want to discuss that with an attorney there in light of all your assets..your goal is to protect all assets as of the date of the reopening on the real estate as once reopened..why can keep the trustee from liquidating if not all exempt? It might not seem fair but I don't know what will prevent that unless you protect all. In Washington, we have one judge now who requires that the exemption of NO EQUITY case still be listed in Schedule C as zero so we can avoid judgment liens. I would imagine the value as listed at time of the case would still be correct then but as a practical matter it wont matter as trustee can sell anyway..unless all equity is protected..so discuss with your attorney..get an attorney who has practiced for a number of years in your area! However, before you do that, I have done the following for a number of years in such a case: Offer each judgment creditor in a letter $500 if they will agree to enter full satisfactions of judgment explaining that you are going to have to pay $1000 to your attorney including the fee to reopen the case.and require an answer within so many days..include all facts..your copies of schedules when filed, both Schedule A, and C and D. showing there is no equity. Include your contact information. If they both agree and you provide them money order or cashier checks, etc. you are going to be really happy to have offered it and it is done NOW instead of down the road in bankruptcy court. I hope my answer assists you..Good Luck..and I know you don't want me to say it..but GO SEAHAWKS>. .hope you have a sense of humor!
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The short answer is "yes" but this is not a DIY project. Get your lawyer to do it at a reduced price (assuming you still have confidence in him) or shop around by clicking the "Find a Lawyer" tab on the AVVO website. Good luck.
You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is based on general legal principles. You become a client when you enter into a formal retainer agreement with me.
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Chapter 7 Bankruptcy Attorney
In theory, you should be able do so, but definitely consult with an attorney. It is a three step process. Step one is to file a motion to reopen the case for permission to file motions to avoid the liens and to amend your exemptions (you must serve all creditors and parties in interest), step two is to amend the exemptions once the case is reopened, and step three is to file and serve the motions to avoid the liens. The valuation of the real estate for purposes of the lien avoidance motions should be the value as of the date you originally filed the Chapter 7.
This post is for informational purposes only and is not specific legal advice for your matter. Please seek advice of an attorney for guidance in your specific legal matter. I am a lawyer and debt relief agency helping persons file bankruptcy under the U.S. Code.
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