secured creditor vs judgement

[justbeach03]

What takes precidence a judgement from a secured creditor or a secure creditor with a UCC (with certain assests)? I will be filling non consumer 7 in the next few months.
I have $5000 left in biz account and had a Duces Tecum in Aid of Execution today. Took 1 1/2 hrs (reporter said it was the longest she's seen). The attorney asked for EVERYTHING (personal and biz) to be copied! 2years of bank statements, taxes, bill of sale for car, P7L, Balance sheet.

Should I let him just take the $5000 or give it to another secured creditor?

[justbroke]

Can't provide advice on "diverting" or, as they say in the business, delaying, hindering or defrauding a creditor. I'd especially be careful with a judgment since if you tried to divert the money to an otherwise exempt asset, after you know a writ will be signed to levy assets... is just fraud.

There are some things that change the priority for secured creditors. For example, HOAs in Florida enjoy a superlien superior to all others... well... except for a tax lien or the IRS! Tax liens are almost always the highest priority. Whether a consensual lien (e.g. a mortgage) has priority over an HOA lien, is statutory (based on your State's non-bankruptcy laws). Since you are in Florida, an HOA would have a superlien against all the mortgage note holders.

Now, a simple "judgment" creditor is an unsecured creditor. If the "judgment creditor" files and records a lien, then they now have a judgment lien. The judgment lien is a non-consensual lien that attaches to all property that you have or may acquire (up to the point of a bankruptcy).

If you're filing within 90 days, it is highly likely that the Trustee would seek to avoid the transfer (the levy) of the money and claw it back for all unsecured creditors.

Aside from this post, I participated in a discussion with you on a different topic (British Petroleum claims related). This seems to be getting very complex. Why are you waiting to file?

[justbeach03]

justbroke- Thanks for the feedback. We have discussed previously about BP check...actually- I just "bumped" that post. Yes, it is complex and trying my nerves. I filed with BP in May2011, but still haven't recieved any word on final payout settlement (they use the delay & stall tactic on everyone to get them to settle for less). I was hoping it would be sizable enough to settle with all creditors and avoid BK, with a little left over for myself, as recommended by afew other posters.

[justbroke]

What you write is exactly why "waiting" for money in order to settle, becomes problematic. I am not even referencing the issues with taxes when you receive 1099-C (forgiveness of debt) forms from the creditors.

Perhaps the wait isn't worth it? If you had filed bankruptcy, you might already be on your path to a fresh start? (Although the Trustee may have gone after the BP Claim.) From what I read on the BP site, the claims "advances" were pretty fast... if you had all the right paperwork. What is the holdup?

[justbeach03]

Hum- didn't think about the 1099-c?!! Don't believe everything you read on their BP site. The hold up is that it was converted from a personal claim to Biz claim and I had to close the biz. The claim "advances" for emergency payments were pretty fast, but the final ones with closed business are taking a long time, according to the firm I hired to help expedite it, because there is no "formula". It's a case by case, with lots of paperwork involved.

[justbroke]

Okay, so you're not in the advance stage, you're in the final settlement portion. Yes, those could take time as they evaluate the business records I suppose. In any event, you are in a complex situation and it may just be beyond our collective (BKForum) experiences.

[justbeach03]

Come on...You guys are wizards at everything! ;) After sleeping on it, Came to the conclusion that it's easier to just let the Trustee figure it all out and not deal with 1099-c. I was just hoping to be able to settle and have something to show for 8 yrs of biz ownership, after that was stripped away from me (Thanks BP). But a clean start without stress will be nice! thx

[justbroke]

Wizards in the technical aspects of filing and getting to discharge in a bankruptcy. I personally choose not to get into asset protection issues since those are delicate and you can actually lose the asset, or worse, if you do the wrong thing. (It is also why I stay away from telling folks exactly which exemption scheme to use or which statute to use to exempt property.) I don't like people to lose money or property because they made an uninformed decision, or were simply misinformed.

Just run the numbers and see what works. Since you're in Florida, I suggest that you see, based on your other property needing to be exempted, how much of the $5,000 wildcard you'd have left to apply.

So wipe that black tar oil off yourself and get your clean start.