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Does interest accrued on a judicial lien?
I always call it the 1111(b)(2) election so I don't forget about
1111(b)(1), which is a very unique provision and unique to ch 11.
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Giovanni Orantes, Esq.*
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I always call it the 1111(b)(2) election so I don't forget about 1111(b)(1), which is avery unique provisionand unique to ch 11.
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I'm assuming the property has equity, but query how Section 506(b) operates
in a situation in which the creditor was under-secured on the petition date.
Giovanni Orantes, Esq.*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 2920
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
**Certified Bankruptcy Specialist, State Bar of California, Board of Legal
Specialization*
*Board Certified - Business Bankruptcy Law - American Board of Certification
*Board Certified - Consumer Bankruptcy Law - American Board of Certification
Commercial Litigation
Estate Planning
Outside General Counsel
WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
I'm assuming the property has equity, but query how Section 506(b) operates in a situation in which the creditor was under-secured on the petition date.-- Giovanni Orantes, Esq.*Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 2920Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.comwebsite: www.gobklaw.com
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Yes, if the judicial lien is not avoided, it survives the bankruptcy and continues to accrue interest at the legal rate. See Songer v. Cooney, (1989) 214 Cal.App.3d 387 and Songer v. Bordan, 2002 WL 1904425, in which the appellate court affirmed renewal of the discharged judgment (with interest) to renew the judicial lien which survived the bankruptcy.
Think of it the same as a mortgage loan. The Note is discharged as a personal liability of the debtor, but the Deed of Trust survives. Of course we don't question that the mortgage lien continues to accrue interest at the Note rate.
Jim
James R. Selth
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