Is this even allowed?

[mysticspirit25]

A friend of mine had a Ch7 Discharged, and there was a judgement included. They filed pro se. The judgment was included and discharged, but there was a lien recorded in the court. And the judgment holder is refusing to allow him to sell his house without the lien satisfied.

[HHM]

Yep, that is allowed. if the judgment was properly recorded as a lien, the creditors can demand payment.

This situation points out a pitfall of filing Pro Se (you don't know what you don't know), this would have been a fairly simple matter for an experience BK attorney, and they would have filed a 522(f) motion to remove the lien.

Now, the debtor has the following options (1) pay or otherwise settle the lien with the creditor, (2) pay a bankruptcy attorney to figure out if they can reopen the BK case and still remove the lien.

An investment in a Bk attorney at the outset would have prevented this situation, too bad many pro se debtors are short sighted or don't do their homework.

[tobee43]

so true hhm.

can't an atty still file an motion to vacate that lien outside of reopening the bk?

[HHM]

so true hhm.

can't an atty still file an motion to vacate that lien outside of reopening the bk?

Generally no. Liens survive BK including judgment liens. If the lien is (legalese coming) "perfected", meaning the creditor took the judgment and recorded it at the county recorder office, the lien becomes a secured debt and will survive BK unless the lien is dealt with in the BK.

Think of it like the 2nd mortgage scenario in chapter 7. The chapter 7 discharges the debtor's personal liability on the 2nd mortgage, but doesn't discharge lien. Even in FL where they allow 2nd mortgage lien strips, you still MUST file a motion in BK court to get the lien stripped.

The point being, when it comes to secured debts, lien removal is not automatic, the discharge does not affect the "secured interest". Assuming the lien can be stripped, the debtor must ask the court to do so. Which didn't happen here.

[tobee43]

thanks hhm for the clarification. yes, i just saw the recent decision here in florida, yet i do understand the motion had to file prior to the close of the bk.

that's really a shame for the OP.

[HHM]

The OP may be able to re-open the case to do it (I really don't feel like figuring out ). But at this point, the OP should get a lawyer.

[tobee43]

i hear you hhm.

OP..your state may have a statue of limitation to re-open your bankruptcy case. if i were you, i would call an atty ASAP, get the case re-open and file the motion to get that lien taken care of. you need to weigh it out, in the end it will cost you anyway, however, the lien can incur interest and other fees. i would suggest and hope you can get this straighten out. best of luck to you!

[OHBOY]

I don't know where the original posters friend is residing, however IF he/she is in FL this is what I am reading (below). If the judgement gets removed does it not stand to follow that the lien too is gone ????


The 2012 Florida Statutes

Title VI
CIVIL PRACTICE AND PROCEDURE Chapter 55
JUDGMENTS View Entire Chapter

55.145 Discharge of judgments in bankruptcy.—At any time after 1 year has elapsed since a bankrupt or debtor was discharged from his or her debts, pursuant to the act of congress relating to bankruptcy, the bankrupt or debtor, his or her receiver or trustee, or any interested party may petition the court in which the judgment was rendered against such bankrupt or debtor for an order to cancel and discharge such judgment. The petition shall be accompanied by a certified copy of the discharge of said bankrupt or by a certified copy of the order of confirmation of the arrangement filed by said debtor. The petition, accompanied by copies of the papers upon which it is made, shall be served upon the judgment creditor in the manner prescribed for service of process in a civil action. If it appears upon the hearing that the bankrupt or debtor has been discharged from the payment of that judgment or of the debt upon which it was recovered, the court shall enter an order canceling and discharging said judgment. The order of cancellation and discharge shall have the same effect as a satisfaction of judgment, and a certified copy thereof may be recorded in the same manner as a satisfaction of judgment. This section shall apply only to liens under judgments or obligations duly scheduled in the bankruptcy proceedings.
History.—s. 1, ch. 70-12; s. 297, ch. 95-147.

[tobee43]

OHBOY,

in florida, and this varies from state to state, even if the lien was listed on the petition one must wait out a years time to file a motion to vacate the judgment. while in other states...i.e. one can go right back after the discharge and file the motion to vacate. so, even tho the judgment may have been discharged one still must file that motion. once again, in florida that's a year and although it can be done pro se, it's best to have an atty do it and follow through to make certain it is completely removed.

i have seen where they still come up after being granted the motion to vacate years later!!! what a mess it at times. however, again, i don't know why exactly other than the motion was never filed after the discharge.

and after re-reading OP's posts if this judgement was in fact included there should be no reason the motion can not be filed, unless, again it's been under a years time.