The Phillips filed a Chapter 13 bankruptcy and successfully avoided the judgment lien held by McInnis. The Order allowing the avoidance provided that:
3. The Judgment lien of the McInnises is declared to be void and shall be removed of record upon the completion of the Chapter 13 Plan of the Debtors and entry of the discharge in this case pursuant to Section 506 of the Bankruptcy Code.
4. In the event the Debtors fail to complete their Chapter 13 Plan and receive their discharge, the McInnises’ lien shall remain unaffected as to Section 506(a) and (d) of the Bankruptcy Code by this order.… Read More
Ferguson obtained a judgment in 2008 against the Robert Dean, who, with his then wife, Lisa Dean, subsequently filed a Chapter 7 bankruptcy in 2010. Believing that the real property was held as Tenants by the Entireties, the judgment lien was not avoided and the Deans received a discharge. Subsequently, the Deans divorced with Mr. Dean transferring his interest in the real property to Lisa and her new husband. When Lisa sought to refinance the real property in 2015, the judgment lien was discovered. The Debtors then sought to re-open the bankruptcy and to avoid the lien, with Ferguson objecting.… Read More
Grimes owns real property with her husband as tenants by the entireties. After filing bankruptcy, she sought to avoid the fixing of three judgments at any later point against that property should it later cease to be held as tenants by the entireties, for example due to divorce or her husband’s death.
The bankruptcy court, dissenting from In re Corey, 2013 WL 3788239 (Bankr. E.D.N.C. 2013), held that 11 U.S.C. § 522(f) did not allow the avoidance of a hypothetical future “fixing of a lien.” That notwithstanding, Grimes’ discharge protected her from such hypothetical future liens as “[without a debt, no lien can be created.”
In fact, an attempt to fix such a lien with no underlying obligation in the future would constitute a discharge violation.… Read More
Abuharb filed his first Chapter 13 case, receiving a discharge on January 23, 2014, including any personal liability on a claim owed to Mission Valley Shopping Center (“MVA”) for a judgment in the amount of $38,093.14. At that time, Abuharb owned his residence at 8301 Rubblestone Path, but the Chapter 13 plan provided that the property was to be surrendered. When Abuharb subsequently obtained a loan modification for the mortgage on his residence, he neither modified the plan nor sought to avoid the judgment lien of MVA. After that bankruptcy completed, Abuharb twice sought to re-open the case to avoid the judgment lien, with both motions being denied due to the lapse of time and Abuharb’s failure to both avoid the lien at that time or modify the plan.… Read More
Mr. Powers is the owner of a 50% undivided interest in his home, which has a total value of $292,000.00. Bank of America holds a Deed of Trust against the entire property with a mortgage balance of $180,972.92. Mr. Powers also had three judgment liens against his interest, held, in order of seniority, by John Deere for $14,952.50, Evergreen for $4,617.48, and Farrar for $29,346.44. Upon filing of a Chapter 13 bankruptcy, Mr. Powers sought to avoid all three judgment liens as impairing his homestead exemption of $35,000.00.
11 U.S.C. § 522(f)(2)(A) sets forth the following methodology for determining the extent to which a judicial lien impairs an exemption:
[A] lien shall be considered to impair an exemption to the extent that the sum of –
(i) the lien;
(ii) all other liens on the property; and
(iii) the amount of the exemption that the debtor could claim if there were no liens on the property;
exceeds the value that the debtor’s interest in the property would have in the absence of any liens.… Read More
The Debtor served a copy of a Motion to Avoid the Judgment Lien held by Main Street Acquisition Corp. at its place of business and also by serving its attorney in the state court action. She did not direct service of the Motion to either “the attention of an officer, a managing or general agent or any other agent authorized by appointment or law to receive service of process…” Bankrupt Rule 7004(b)(3).
Without deciding whether the Debtor need to name a specific person for service or if “the service may be more generally and generically addressed to the attention of an officer, a managing or general agent or any other agent authorized by appointment or law to receive service, the court found that lacking any such, service was insufficient.… Read More