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Question about amending Chapter 7 petition to include just-issued abstract of judgement.

Palmdale, CA |

We are in the process of Ch 7 in Central CA district. Had the trustee meeting a week ago. The judgement that the credit card had gotten, plus the original debt were both included in the filing. However the same creditor just issued an abstract of judgement through the court. Is there a way to amend our schedule (E?) and add this abstract of judgement to the bankruptcy? If we are able to do this, will it be wiped out in the discharge, as well? Thank you.

Attorney Answers 5

Posted

Depending on the status of your case, you might not have to amend your schedules especially if your case is a no asset one. Was the creditor properly listed including the name of their counsel? The reason I ask is that filing an abstract of judgment has been found at times to be a violation of the automatic stay because the creditor is pursuing a postpetition action to continue enforcement of a prepetition claim. This does depend on the status of your case.

You should raise this issue with your attorney. If you did not retain one, you have an example of why if can be dangerous to go this type of case alone.

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Asker

Posted

Thank you for your reply. No attorney, as we could not afford one. Would have if we had the funds. It is a no asset case. They waited more than 30 days to enter the abstract, and I am just trying to find out if it will be possibly beneficial to add the abstract to the ch 7, which is still open. The house has no equity and is actually about 200k upside-down. I just want to try and include this before the discharge if there is a chance it can also be included in the bk.

Posted

I agree with Attorney Vassallo, if you had the creditor's information your original schedules there is not need to amend. Schedule E is for priority debt, not general unsecured debt (f). Also, I agree that the Abstract is a violation of the stay, you should discuss this with your attorney. Also, it does not appear there is a reason for the debt not to be discharged.

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Posted

Thank you for your reply. Schedule F is the one I meant, then. The original creditor and their attorney are both on the schedule F. And they waited more than 30 days to enter the abstract, so I am not sure if that is still a violation of the stay or not. There is no reason for the debt to not be discharged. I just want to include this abstract in the ch 7 is that is something that can be done. And then I am trying to figure out the process for amending the schedule F.

Posted

Very possibly the creditor's recording of the abstract is a violation of the automatic stay. We have addressed this with the creditor successfully outside of bankruptcy court.

Talk to your lawyer who should be able to handle. If you don't have a bankruptcy lawyer assisting you through this then you may be wise to find one now.

Best of luck

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Michael Salanick

Michael Salanick

Posted

* We have previously addressed this situation with the creditor successfully outside of bankruptcy court.

Posted

You don't amend Schedule F to "add an abstract" because the debt represented by the abstract should already be listed in your Schedule. What you can do is amend the debt to show that creditor was represented by counsel, and list the name, address of counsel. As pointed out by others, you should check to see if the abstract was issued AFTER your case was filed because that action may be considered a violation of the automatic stay. If the abstract was issued AFTER the date your case was filed, your lawyer should contact the atty for the creditor and insist the abstract be withdrawn and notice of same be recorded to remove any lien against real estate you own. You should also file a Notice of Stay with the state court so they will not issue any further documents (writs, etc) while your BK case is pending.

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Asker

Posted

Thank you for your answer. The debt and the attorney are both listed on our schedule F. Our main concern with this abstract is can we somehow add the abstract to the BK right now, while it is still open. Not sure we will even keep the house in the future, might end up walking away, so the abstract being on the house is not the real issue, I don't believe. We want to remove it so it is not following him around if he goes to get a job or something down the road, in another location, so it does not come up on a credit report or background check. We do not have an attorney, as we cannot afford one, so having our attorney contact their counsel is not an option. We can, however send the Notice of Stay of Proceedings, along with out proof. Any other thoughts you may have are certainly appreciated. Thanks.

Stuart Gregory Steingraber

Stuart Gregory Steingraber

Posted

A recorded abstract of judgment survives the BK discharge unless you file a motion under 11 USC 522(f) to avoid it. If you acquire other property later on, the abstract of judgment does not attach to that property. The abstract will not "follow him around" because the underlying debt will be discharged and the abstract can only attach to existing real estate. The filing of BK will be a bigger ding on your credit report than a recorded judgment. I am happy to help you by notifying the creditor's lawyer about your BK and request them to withdraw it IF it was issued/recorded AFTER your BK.

Asker

Posted

Thank you. We filed on 8-20-13, had trustee meeting 9-19-13 and the abstract shows as being issued on 9-27-13. That is one thing I was not sure of is if it would survive the BK or if the BK would wipe it out, as well. My understanding was if we move out of state and later want to buy property, the abstract won't be able to attach to that. Only if we try to buy in the county, which is L.A., where it was issued. If I understand you correctly, however, the abstract can only attach to existing property, which we most likely will let go at some point, anyway. Please let me know if you think the timing I placed at the beginning of this comment sounds like they did indeed violate the automatic stay. If your opinion is that they did violate it, then I would like to talk with you about if we can work something out to take you up on your offer to contact the creditor's lawyer asking them to withdraw it. I do have a Notice of Stay ready to send to the court. It seems to me it cannot hurt to go ahead and send that so they will not issue anything further right now. I have not yet mailed it. Thank you.

Stuart Gregory Steingraber

Stuart Gregory Steingraber

Posted

You can reach me by clicking the tab "contact this lawyer now" across from my name.

Posted

You need to file a notice of stay CM-180 in the state court proceeding. You file the notice of stay along with a copy of your notice of bankruptcy case filing and that will stop the state court matter. If you properly listed the lawsuit and the creditor received notice then you need to send them a letter that says they are in violation of the automatic stay and if they do not rescind the abstract immediately you will file a sanctions motion against them.

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